At the end of July, the results of the private wealth stock market indicator made it seem advisable to significantly reduce the equity allocation from 110 per cent of the individually planned equity allocation to 90 per cent and to increase the cash allocation accordingly. The main reason for this was the slowdown in the German economy. According to the ifo Institute, 43.6 per cent of respondents from domestic industry now report a lack of orders. As published at the time, only the sustained positive probability landscape of the capital market seismograph prevented an even more drastic reduction in the share quota. This raises the interesting question: How is the seismograph reacting to the recent turbulence on the stock markets? Is this...

The ifo business climate survey for July not only puts a big question mark over hopes of an economic recovery in the second half of the year. There is now even the threat of a renewed slide into recession in industry. This has consequences for the investment strategy. Background: If business expectations in industry deteriorate three times in a row after a sustained upswing, this has often signalled a downward economic trend reversal in the past. In this case, the economic component of the private wealth stock market indicator consistently switches from "green" to "red". This is exactly what could happen at the end of August. The background: in the ifo Institute's monthly survey, participants have a choice of three possible answers: They...

The ifo Business Climate Index for June shows a surprisingly significant decline in industry, which is so important for the private wealth stock market indicator. The index for business expectations in the manufacturing sector fell from minus 6.4 points to minus 12.3 points. This is the first decline since December 2023 and a clear damper on hopes for positive economic development in the second half of the year. Why have company bosses suddenly become more pessimistic when the ifo Institute itself has just raised its economic forecast slightly and is now saying that the German economy is on course for recovery? We suspect that two political developments have contributed significantly to this. One is the threat of tariffs on e-cars from...

The ifo Business Climate Index for May continues to point upwards in industry, which is so important for the private wealth stock market indicator. The index for business expectations in the manufacturing sector improved from minus 8.3 points to just minus 5.7. On balance, the number of company bosses who expect a more favourable business trend is now roughly equal to the number of those who anticipate a less favourable trend over the next six months. This underpins the positive assessment of the private wealth stock market indicator for the German stock market, which has been valid since October. In October 2023, the stock market indicator gave a buy signal when the DAX fell below 15,000 points. The equity allocation was initially raised...

We wrote here a month ago that the German economy should have bottomed out in February. The ifo Business Climate Index data for April supports this assessment. Sentiment among companies continued to improve last month, and the stabilisation process of the economy is still proceeding according to the textbook. This can be seen most clearly in the ifo Business Cycle Clock. The German economy is still in the crisis quadrant. However, in April the indicator made a big leap towards the recovery quadrant (Chart 1). The improvement in industry, which is so important for the private wealth stock market indicator, is particularly impressive. The index for business expectations in the manufacturing sector made a big leap upwards (chart 2). In the...