We have to do it in the current crisis, with a completely asymmetric perception of the Situation. Either the Chinese exaggerate the brutal and choke their own economy for the fun of it, or the Western institutions, the situation is not to take Far from seriously enough. Is the Coronavirus that has pretty much all the properties of a pandemic virus. With the sparse information that reached us in Germany, it is estimate, however, is impossible, where the journey is going in the end.
what is the reaction of the stock market?
The financial markets behave like a closed Casino. Indoors is played with the cheap money of the Central banks diligent, no matter what happens outside. It must be the before eye: We have the most important economic area of China in Lockdown. Millions of people were placed under quarantine. Delivery interrupted chains. In addition, the unresolved trade-simmering dispute. If you would have asked 20 years ago, a Fund Manager, where the exchanges in such a scenario? The answer would have been: total Crash. DAX 13.789,00 PT. +107,81 (+0,79%) Xetra
- 1 day
- 6 months
course data
Today, taking the markets to the occasion, to rise to new highs. This discrepancy will need to take investors ‘ note. It makes simply no sense, on the basis of classic economic and business point of view, to act on the stock exchange. When the door of the casino closes and the financial markets are the real economy, then, is to be expected with a very painful correction. Until then, everything is in this Casino is possible.
such A Situation, there were way ever. The Bustle reminds me of 1999/2000, when the stock markets were also detached from the real economy. The reviews of the company in proportion to their sales and profits are now more than athletic. For example, the Buffett indicator, of the market capitalization in percent of the economy, measures the performance, shows, for the S&P 500 already at a similar level as in 1999. In relation to the risks inherent in the stock market are much too expensive.
Great risks for private investors
Currently, I can therefore recommend anyone with a good Conscience, to put a greater proportion of Assets to a shock in the markets. So what can you do? My advice would be to use the so-called Cost-Average effect and to stretch the investment, for example, via a savings plan. To avoid the stock market completely would be a mistake. There is currently simply no meaningful Alternative for an investment. And the Party at the Casino can go a few months or years.
The trade conflict comes back
in Particular, in the run-up to the US election at the end of the year, Trump is located, for example, very high stock prices, and a functioning U.S. economy. He has concluded a truce with China. He also has a trillion Dollar infrastructure package in the drawer. Also, the Central banks will do everything to prevent setbacks. Forever, investors should not rely, however, on the monetary authorities. I assume that Trump will proceed to a re-election much more aggressively against China, and also large economic dislocations does not shrink back. The Americans can, and global domination will not leave simply voluntarily to China.
in Particular, for the German economy this means nothing Good. While Trump has done since his election, everything, in order to prepare the company in the United States in this conflict, Germany and Europe ignored this development entirely. What are the consequences of the now massive dependence on China for our economy, we will get in the next few months in the balance sheets of German companies and, above all, on the basis of profit warnings from the automotive industry to feel painful.
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