Expertenrat – just in time.
There are currently four questions driving the investment experts around:
The grace period is over - can Emmanuel Macron get France going? Bundestag elections - what would a black-yellow government bring to the German economy and the capital markets? Euro boom - how long will the upswing in the European currency last and what does it mean for Europe's export economy? Price targets reached in the US equity market - how should investors now trade?
// 01. Can Macron get France going?
Emmanuel Macron wants to reform the French labour market by the end of the summer. 84 percent of the experts believe that this plan will have a significant impact on the capital market. The chances of success are good. After all, two thirds of the respondents believe that Macron will achieve its first results by the end of September. As a litmus test, they see it as whether progress can be made on the following points against the resistance of the trade unions: Relaxation of protection against dismissal, breaking up compensation claims in the event of dismissal, flexibilisation in the drafting of employment contracts. Conditionality of unemployment benefits and abolition of the 35-hour week.
If Macon wins out on these points, the round believes that French equities have the potential to outperform Europe as a whole.
// 02 What would a black-yellow government bring?
Current surveys suggest that a black-yellow coalition would be possible after the Bundestag elections. 63 percent of the investment experts believe that this would have a positive impact on the German economy and the German stock market. The experts expect such a government to bring about genuine reforms in the areas of education, immigration, pension policy, taxes and public procurement law. Specifically, they expect in this case a business-friendly economic policy and a return to the basic ideas of Agenda 2010, faster approvals to optimize transport networks, bureaucracy reduction and an increase in digital performance.
The rejection of a wealth tax, the promotion of SMEs and regulatory relief would stimulate companies' propensity to invest and create confidence among investors. The professionals conclude that although political stock markets have short legs, positive impulses are also to be expected initially because Anglo-Saxon investors are in a "mercantile-friendly" mood.
// 03. Is the upswing in the euro continuing?
In the past six months, the euro appreciated by around ten percent against the US dollar. Will this new trend continue? The majority of the Lerbach participants do not believe this. 64 percent say "no", 36 percent say "yes". This is good news for the export-oriented German economy and its investors. Because even a persistence of the euro exchange rate at the current level would have a negative impact on future earnings development, according to the round. Should the euro even move into the range between 1.25 and 1.30 US dollars, there would be a real threat to earnings with corresponding effects on the stock market.
// 04 Price targets reached in the USA. What to do when the Lerba
When the Lerbach Round met at the end of March 2017, experts did not yet consider the US stock market to be exhausted. The S&P 500 was at 2350 points at the time. Only at a level of 2500 was the index highly valued. This price target has now been reached. Three quarters of the professionals now consistently advise to reduce or hedge between 25 and 50 percent of the stock holdings - for example by means of a narrow stop loss, which should be continuously trailed if prices continue to rise. ®
Since 2010, the Lerbach Round Table - asset managers, private bankers and family officers - has been meeting every spring to provide wealthy investors with inspiration and orientation for next year's investments.
But the world of capital markets is turning ever faster. To make it possible to make use of the competence of the professionals at any time, private wealth and its partner Robeco have created the prerequisites for an online survey of the Lerbach round. These surveys do not take place on a regular basis, but on a case-by-case basis, in order to obtain expert advice only when questions arise whose answers offer wealthy investors real added value.