On the fag end.

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With every weaker growth figure and every negative news from the corporate sector, more and more investors are beginning to think the seemingly unthinkable. Can it really be that the world is facing another recession?

At first glance, the nervousness on the markets is completely contrary to official forecasts. The OECD, for example, expects growth of 3.0 percent this year and 3.3 percent in 2017. No sign of recession? Not a trace. The Auguren see the decline in commodity prices in particular as a huge economic stimulus package. This could reassure us if it weren't for our experience that economists usually don't recognize a recession until it's already there.

In the spring of 2008, for example, the major German research institutes expected growth of 1.7 percent in the euro zone in 2008 and 1.6 percent in 2009 - although researchers were already saying at the time: "US real estate crisis is weighing on the economy". None of them even came close to crashing to minus 4.0 percent in 2009.

What is the reason for this? What the researchers describe as "financial stability risks" is obviously unpredictable. Major corporate and state bankruptcies, banking and credit crises, capital flight, currency turbulence - all the things that can trigger domino effects. These risks increase when there is too much debt in the system after a long period of recovery.

Today, these financial stability risks are greater than they have been for a long time. There are an above-average number of triggers that could overturn the first stone: geopolitics. China. Brexite. Commodity collapse. Bankruptcies of the US fracking industry. Europe's disunity in the refugee crisis... At the same time - especially in the USA - share prices are still above average.

This combination actually makes the investment strategy very simple. We are wealthy. We don't have to become one. We just want to stay that way. Our great advantage over the financial industry is that we can stay on the sidelines for a while in such situations. And to consciously accept that we might give away a few percentage points of earnings. In a few months we will see more clearly where the scales are heading. Until then, we will keep you up to date at www.private-wealth.de .

Translated with www.DeepL.com/Translator

In the next three months, the user ID will be: privatewealth, the password: Achterbahn.

Klaus Meitinger     Moritz Eckes

Editor-in-chief      Publisher

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