In the middle of a boom.
The mood in German companies is getting better and better. The ifo business climate for industry has now reached its highest level since July 2011. Expectations for the coming six months are even more optimistic than in February. And export expectations are also increasing. All in all, as the graphs attached show, the German economy is
in the middle of a veritable economic boom. This is underlined by the ifo traffic light. The signal is clearly green.
The capital market seismograph of Professor Dr. Rudi Zagst's team (TU Munich) also supports the positive assessment. In the current forecast, the probability of a calm, positive US equity market is 95 percent. The probability of a turbulent, volatile market with a positive trend ("yellow") is four percent. And the probability for a bear market ("red") is only one percent. The seismograph recently delivered similarly positive results in the boom market between summer 2006 and summer 2007.
For investors in equities - at least as far as the economy is concerned - there is currently no cloud in the sky to be seen. Only the valuation of shares is already quite ambitious and cautions caution. In the meantime, for example, the DAX is already clearly above 130 percent of its fair value. Therefore, the model also "only" proposes a share quota of 60 percent of the proportion of shares that the respective investor considers to be appropriate in the long term.
Our conclusion: As long as the economy does not deteriorate or the stock market does not rise again significantly, the positive basic orientation will remain. It's not the time yet to take profits.
Note: Despite careful selection of sources, no liability can be accepted for the accuracy of the content. The information provided in private wealth is for information purposes only and does not constitute an invitation to buy or sell securities.