Thunderclouds continue to dissipate.
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 the seismograph into allocation proposals for Secaro GmbH.
The bottom line:
The economic traffic light of the private-wealth stock market indicator is green and the valuation of the German stock market is still below its fair value. For this reason, the stock market indicator currently defines a strategic corridor for equity investments between 65 and 95 percent of the individually envisaged equity share.
Within this range, we are guided by the results of the capital market seismograph. Because the seismograph is currently positioned roughly neutral, the equity quota suggested by the private wealth stock market indicator moves into the middle of the strategic corridor. Specifically, the quota increases from 77 to 80 percent of the individually intended equity share.
This reference to the individually intended equity share is important to us. Models like the private-wealth stock market indicator can only ever be based on economic data. How high the individual share quota should be in times of war must be decided by each investor on the basis of his or her own risk appetite and risk-bearing capacity.
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.