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A road sign warning of uncertainty against a stormy sky

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Even the best-prepared investors today will be tested by some rather tricky risks on the horizon: the next 25-basis-point U.S. rate hike, a prolonging of the profits recession into the third quarter, the obliteration of the human race, to name but a few.

While humanity has had a good run by some measures, eventual oblivion by one cataclysm or another is a virtual certainty. And doomsday has some big market implications, says Montreal-based BCA Research.

"The complete annihilation of all human life represents the mother of all tail risks," BCA Research said in a strategy report titled "Doomsday Risk." "This yields a number of profound – and rather surprising – investment conclusions."

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This is not an ill-timed April fool's joke, as BCA's managing editor, Peter Berezin, said he's been telling inquiring clients over the last couple of days. Attempting to put a timeline on the end of days may seem silly, and through an investor's lens sillier still. But even distant, extreme risks can influence investor behaviour today, at least at the margins, Mr. Berezin explained. At the very least, he can't be accused of regurgitating consensus market research.

The report relies on a probabilistic rationale from the realm of theoretical physics known as the "Doomsday Argument," which seeks to calculate the number of future births based on the sum of human lives lived in all of human history. Chances are, we're roughly in the middle of that distribution, the argument goes. From there, one can estimate the likely lifespan of the human species.

Based on an estimate of 100 billion people having ever been born, and accounting for long-term fertility rates, Mr. Berezin calculates that there is a 50-per-cent chance that doomsday will occur within the next three centuries, and a 95-per-cent chance that it will occur by 2710.

"Right now, humanity is in a rather precarious state: We have the technology to destroy the earth, but we have not yet developed the technology to survive beyond it," he said.

A higher doomsday probability might suggest the average investor would be less inclined to save today.

"If the risk of doomsday is, in fact, elevated, what is an investor to do? For one thing, 'saving for a rainy day' becomes a less desirable proposition if that rain consists of fire and brimstone. A lower equilibrium level of savings, in turn, implies a higher neutral real rate, and hence lower bond prices," he said. He's not suggesting that investors liquidate their fixed-income holdings based on eventual human extinction. But if enough individuals perceive a heightened level of existential risk, their behaviour can affect the market today, Mr. Berezin said.

The risk of an apocalypse, however, would fall considerably were our universe just one of many. The idea of a "multiverse" stems from the hypothesis that space-time is infinite. And since matter can be arranged in only so many ways, duplicates are inevitable. If space-time goes on forever, it would be host to infinite parallel universes. And thus, infinite versions of each one of us. Here, the report delves into the truly bizarre, suggesting that one might even consider those other selves when making real-world portfolio choices.

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"The possible existence of a multiverse where there are myriad versions of 'you' also raises interesting investment considerations," Mr. Berezin writes. Would you be more inclined to play the lottery – or buy a highly speculative stock – if you knew some parallel version of you, somewhere, must be a big winner? If so, you might conversely be less willing to own securities that had the small chance of a major loss, like high-quality government bonds.

"If you accept the premise of a multiverse, you should be biased towards holding equities over bonds," Mr. Berezin said.

So, there's a bit of support for the bull market from the cosmos. That might seem like thin air, but the stock market, at times, seems to move on less.

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