The economic component of the private wealth stock market indicator is collapsing. It is advisable to reduce the equity quota as a precaution. The strategic corridor for equity allocation suggested by the private-wealth stock market indicator is determined by two factors - the economic trend and the valuation of the DAX. Basically, the idea is to be more heavily invested in equities when the DAX is low and the German economic traffic light is green at the same time. If the economic outlook deteriorates and/or shares are highly valued, the stock market indicator gradually goes on the defensive. While the valuation of the Dax - it is trading at about the level of its fair value - need not worry investors, massive headwinds are coming from...

Despite all the uncertainty surrounding interest rates, the economy and corporate earnings, the capital market seismograph remains on track. "Most recently, even most input variables have increased the probability of calm, positive markets. The main culprits were changes in the yield curve and a slight brightening of the global economic climate," explains Oliver Schlick, Secaro, who regularly calculates the seismograph with his team and derives allocation decisions from it. His conclusion: "In sum, it remains the case that the state of the indicators continues to justify keeping equity exposure at the maximum allowable level." As they know, the seismograph combines various economic variables - early economic indicators, interest rate...

The Munich-based ifo Institute's business climate index fell surprisingly sharply in May. The slump in business expectations in industry, which play a decisive role in the private-wealth stock market indicator, was particularly sharp. This index fell from minus 2.3 points in April to minus 13.6 points now (chart above). For us, business expectations in industry are so important because they are not only an indicator for the German economy but also for the DAX. In the past, a decline in the index three times after a sustained rise often indicated a downward trend reversal. At first glance, therefore, the May result is not that dramatic. After all, it is only the first decline after a continuous six-month rise. For a classic sell signal...

  The capital market seismograph delivered a little Easter surprise. In keeping with the festive season, the storm clouds seem to be gradually receding. "The long-lasting dominance of negative turbulence probability has ended. Positive and negative turbulence probability (yellow and red) are now roughly equal. In such a scenario, it is appropriate to overweight stocks in the portfolio," informs Oliver Schlick, who translates the signals of the seismograph into allocation proposals for Secaro GmbH. As you know, the seismograph combines various economic variables - early economic indicators, interest rate developments or price fluctuations on the stock markets. From these, the probabilities for three market states in the next month...

  A week ago we informed you here that the probability distribution on the seismograph had improved step by step. In recent weeks, the red probability for turbulent-negative markets had gradually decreased towards two-thirds - to the same extent, "yellow", the probability for positive turbulence, increased. Consequently, the underweighting of equities in the allocation proposal of the model was reduced and the equity quota slightly increased.This trend continued recently. "The probability landscape has shifted further in favour of the "yellow" expression. The new recommendation is to take the share of equities in a mixed portfolio a little further out of the defensive range," informs Oliver Schlick, who translates the signals of...