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Heino ReentsAsset Allocation & Investment Strategien3 MIN READING TIME2018-11-22

Why capital market experts now advise you to get started

Four capital market experts took a very optimistic look at the coming year at a podium discussion in Hamburg at the invitation of the fixed-income specialist nordIX.

The bad news in advance: The legendary Goldilock scenario is passé, Italy, Brexit and Trump are the main reasons for a clouding of the still at the beginning of positive conditions. As a result, the uncertainties on the financial markets are noticeably increasing. But how will 2019? At the invitation of nordIX, four well-known capital market experts in the Hamburg Overseas Club ventured an outlook on the coming year.

But first, the event hosted by nordIX board member Moritz Schildt looked back. There was not much to fetch for investors in 2018 so far, both equity and bond markets have been in negative territory so far. And that although investment pressure actually exists, as Jens Franck, Portfolio Manager of nordIX put it. "The markets are waiting."

For Bastian Bosse,   Head of Asset Management at BRW Finanz AG, the market environment offers opportunities above all. "For such markets, the customer has us". With a balanced portfolio you can still achieve a return. And Dr. Christoph Kind, Chief Investment Officer of Family Office Marcard, Stein & Co, pointed out that the current environment means a new experience for many investors. "Customers are spoiled by the past ten years."

Trade conflict charged

All experts agreed that the budget dispute in Italy in particular, the trade conflict between the US and China, and the unclear Brexit situation threatened to weigh heavily on the financial markets. According to Carsten Mumm,   Chief economist at DONNER & REUSCHEL, especially US President Donald Trump has shaped the year, starting with the tax reform, which, while pro-cyclical, has nevertheless given a boost to the positive economy. And the "trade war with the rest of the world," which Trump started, was causing market activity. "The trade war is the worst hit in the economy," said Mumm.

Controversial was the discussion on the subject of Italy. While NIXIX man Franck called for prudence ("the system is on the whole very crisis-resistant") and referred to the recent positive balance sheets of Italian banks, stressed. Child the great importance of Italy for the EU. After all, the country is the largest borrower in the euro area. "And the capital market has already crossed the thumb," warned child. In spite of the current difficult situation, economist Mumm is sure: "Italy will not be the coffin nail of the EU and the euro." But in order to compromise in Italy and in Brussels must be prepared.

The fact that the low interest rate environment in the eurozone continues unchanged, all the participants were convinced. Above all, the reason for this is the slowdown in economic momentum, which leaves the development cooperation group little room for maneuver. On the other hand, what impact Brexit will have - in whatever form - is open. "But one thing is clear: Brexit means: Everyone loses," Bosse warned.

No optimism, no euphoria

Portfolio manager Franck was convinced that many negative news items were already priced into the various asset classes. "Many titles have come back to fair valuation levels," said the NordIX expert. He also could not share any fears of recession, so it is currently a good time for him to invest again. The same thing happened to Bastian Bosse. "There is no optimism in the markets, no euphoria. That's a good foundation to invest. "

He was particularly positive about US titles. "The North American stock market still has significant potential," thanks in particular to the effects of the US tax reform, the growth momentum of technology stocks and the positive balance sheets of the crude oil industry. Especially tech titles are volatile and currently under pressure. "But we are long-term investors and do not want to resell a stock like Apple tomorrow, but hold it for five to ten years," said Bosse.

Not so optimistic, however, Dr. Christoph Kind. Investors would have to become more modest in the future. "You can still make money, but it gets harder." Yields would be lower, and support from the central banks would be much lower.

"It is already priced in much, but it can be even cheaper," said DONNER & REUSCHEL economist Mumm. Above all, he is waiting for positive news regarding the trade conflict. Should there be an approximation, the investment signs are also green for gutters. At the end, the four experts agreed on one point: The mood is currently worse than the situation. Waiting is no alternative for long-term oriented investors. Taking advantage of opportunities should be the motto instead.