At the beginning of August, after a long period of maximum defensiveness, the capital market seismograph delivered a first easing signal for equity investors. At that time, there was for the first time again a slight decline in the probabilities for negative turbulence in favour of the probability for positive turbulence. "This means it is appropriate to no longer be maximally underweighted, but only underweighted," explained Oliver Schlick, Managing Director of Secaro Gmbh, a fortnight ago. Because in the past, a change from "red" to "yellow" was often a signal that the worst was over in the stock markets.

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 are distilled. Green stands for the expectation of a calm, positive market. If green dominates, investors should invest in shares. Yellow indicates the probability of a turbulent positive market - invest, but with a sense of proportion. And red indicates the probability of a turbulent-negative market. Then abstinence from equity investments is called for

"Currently, the probability landscape has even shifted a little towards the "green" probability," informs Schlick, who translates the results of the capital market seismograph into an allocation proposal. This not only confirms the glimmer of hope from the beginning of August, but also makes a further, slight position build-up on the stock market seem advisable. "Basically, however, the seismograph retains its defensive bias. After all, the probability of a turbulent-negative market is still at a very high level. We are therefore only feeling our way further back into the market very cautiously," explains Schlick.

The bottom line:

The economic traffic light of the private wealth stock market indicator is on red, but the Dax is still undervalued - based on our fair value calculation. Therefore, the private wealth stock market indicator provides for a corridor for the recommended equity quota between 45 and 75 percent of the individually intended equity share.
Within this range, we are guided by the results of the capital market seismograph. Because the results of the seismograph are currently somewhat more positive, the equity ratio suggested by the private wealth stock market indicator has now been increased from 55 to 60 percent of the individually intended equity share.

Yours sincerely,

Klaus Meitinger

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 informational purposes and is not an invitation to buy or sell securities.