Capital market seismograph reduces equity exposure.
The dramatic development of the last few days and the massive increase in volatility had massively increased the probability of negative turbulence in the capital market seismograph. "This has resulted in a change in positioning on the stock market," Oliver Schlick informs.
As you know, the capital market seismograph distinguishes between three phases: "green" (calm market = buy), "yellow" (turbulent market with positive expectation = invest, but with hedging) and "red" (turbulent market with negative expectation = do not invest).
The probability of a calm market has now shrunk to a very low level, which is not surprising given the uncertainty about future economic developments.
"The probability for "red" is now showing clear upward momentum and is dominating the event. Against this background, investing in stocks is simply too risky. Therefore, a significant reduction in the equity ratio is recommended," explains Schlick.
Since the seismograph now suggests a defensive equity weighting, the private-wealth stock market indicator now only suggests a current equity weighting in the lower range of the bandwidth between 30 and 70 percent of the individually planned equity weighting. We are now curious to see when the seismograph will give the all-clear again and will keep you informed.
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