The markets have been fluctuating for a while, and on Monday they actually collapsed. Japan’s leading Nikkei fell a record twelve percent, while Germany’s leading index fell Dax significantly increased the loss of the previous days, minus 1.8 percent.
And even in the US stock exchanges, which started the year so brilliantly, investors were presented with only dark red price charts. Markets have not fallen into a mythical summer slump, but an actual one.
It’s not getting any easier for investors as prices were already moving higher in some places on Tuesday. The Nikkei rose a good ten percent, partially offsetting the previous day’s losses. Things were not so good for the Dax, although stock market investors commented that it was a good sign that the 17,000-point mark was still holding.
So how should investors behave now? But come back and maybe buy another one for cheap? Some experts remain skeptical, given the $6.4 trillion in total capitalization lost over the past three weeks.
“Now there are knives falling everywhere.”
So does Vishnu Varathan, an analyst at major Japanese bank Mizuho in singapore. “It’s a big decision,” Varathan explains Bloomberg said . In trader jargon, it’s like “catching a falling knife” when traders try to buy a falling stock at the right time. And right now, Varatan says, “knives are falling everywhere.”
The Bank of Japan captured the markets, said Chris-Oliver Schikkentz, chief investment strategist at Capitell AG. The central bank raised interest rates and at the same time reduced bond purchases, which caused “mass nervousness” in the markets. At the same time, the yen appreciated and the so-called bear traders were forced to close their positions.
In this “make trade” case, investors borrowed cheap yen to then invest profitably in the foreign currency. But it doesn’t work if the exchange rate works against the investor. At the same time, certain rule-based investors were also forced to sell.
And last but not least, says Schickentanz, “over the summer, many investors were protected by stop-loss restrictions that caused prices to fall and thus made the crash worse.”
Whoever gets involved now should divide his capital wisely
The stock market specialist clearly says: “The fact is that none of us will fall to the ground. The question is rather: are we “still at the top” and real trouble ahead, or are we “already at the bottom”? We believe that we have not yet reached the end of this corrective movement.”
If you want to get involved now, do it in installments, the expert advises. “Suppose now they have to invest another 10,000 euros. Then I would divide it into five tranches of 2,000 euros. The first installment can be invested today or tomorrow, and the rest at intervals of three to four days each.”
This means investors can get in at a reasonable price, says Schickentanz. “It also means you avoid investing all your capital on the worst possible day.”
“Of course, there are more than just falling knives,” says Udo Rieder, portfolio manager at KSW Vermögens. But. “Given the frozen economy in many regions, deteriorating sentiment indicators and markets struggling in terms of charts, one should not be overly optimistic about a quick short-term market recovery.”
Investors should look for stocks that have been held
According to Reeder, there are likely to be even more favorable entry points, “especially since seasonality is currently not a support either.” If investors “absolutely want to get back in,” they should remember that big losses in investor favorites often have fundamental causes, such as declining overvaluation.
“In this sense, it’s more likely to back away from stocks that have strong fundamentals and have been accounted for,” Reeder says. Investors will definitely find what they are looking for. “Other than the rather expensive Magnificient Seven, the broad US market is at least not wildly overvalued.”
It looks even cheaper european Stocks and securities from emerging markets and China. It is worth watching the second series. “Small-caps are undervalued in nearly every region relative to their large-cap peers and are cheap in long-term historical comparisons.”
As for sectors, there are currently no clear favorites, says Schickentanz. The opposite. “We saw a lot of uncoordinated selling in the Dax on Monday Aeon one of the biggest losers even though the group has a completely defensive and predictable business model. “This is one example of many that just don’t fit,” the specialist said.
Instead of looking at industries, Schickentanz looks for interesting stories at an “individual value level.” There, investors can identify values that have been “disproportionately penalized.” The professional tells FOCUS online that he also has some tech stocks in his sights.
There is a risk of a second wave of sales
Rolf Ehlhardt from Independent Capital Management in Mannheim advises not to rush anything. “The liquidity of the portfolio should be increased to 20 percent. If you have more, you can sometimes buy quality stocks,” says the asset manager. These are, for example Allianz: , Nestle: or Roche . However, Safety First still applies.
According to Elhardt, the stock is still really cheap after this one Theft specifically no. Only precious metals stocks didn’t collapse nearly as much. “Commodity stocks such as Freeport McMoran or Rio Tino also fell at profitable prices; which will then decline from yesterday’s low.”