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  • Klaus Meitinger

But just another bear market rally?

(Reading time: 1 - 2 minutes)

Baerenrallye iStock 997132862

After the positive price development of the last few weeks, many investors hope that this might already have marked the end of the price downturn on the stock markets. But the capital market seismograph dampens this optimism. "The probability of negative turbulence remains absolutely dominant. This is not an environment in which major risks should be taken," informs Oliver Schlick, Managing Director of Secaro Gmbh, who translates the results of the capital market seismograph into an allocation proposal.

As you know, the seismograph combines various economic variables - early economic indicators, interest rate developments or even 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. In this case, abstinence from equity investments is the order of the day.

"Currently, we do not see any significant signs of easing in the key input factors of the indicator. The red probability is dominant, yellow and green do not play a role. In such an environment, the risk for setbacks on the stock markets is high," Schlick explains the seismograph's still very defensive positioning.

The bottom line:

Since the economic traffic light of the private-wealth stock market indicator has been on red for some time now, the strategic corridor of the stock market indicator is an 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 seismograph continues to be positioned defensively, the overall equity allocation suggested by the private-wealth stock market indicator remains at 50 percent of the individually intended equity allocation.

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.

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