Tuesday , August 16 2022

All this year is not right for investors – Economy Minister of Economy: Money


What is the difference in one year? Indeed, investors failed to make mistakes in 2017: what products they invested at the end of the year, their yield diminished. This year, on the contrary, actually all asset classes lead to negative results.

At least a quarter of a century, you have to go back to find such stars: the capital market and the bond market, which is now the price and expense of the world. In addition, investments in oil and other commodities or emerging markets should also stagnate. Even the price of bitcoins is broken
one is still loud after the shot last year.

And what are they called safe? They also provide less protection than costs:
Government bonds in the US and gold in October have been demanded by the biggest market crisis, but the balance in 2018 remains in a negative state. a
very little specifics – a positive result of the present
1.5 percent – German government securities.

Not diversified

shares and bonds are usually moving in the opposite direction. The first one comes to the stage of collecting economy and earning corporate income
due to depreciation, but due to recent interest rates, the price drops. On the contrary, the bonds will have values ​​in the general economic environment, and the share price will decline.
This balancing mechanism is based on the diversification strategy
so there are many investors in the portfolio, both stock and bonds.

But in a year, this defense will never be. how
Deutsche Bank found that at least 90% of them are in debt
So far, 70 asset classes have seen negative total returns so far; Price changes include additional dividends and interest income. Today the worst record is in 1920
Then, 84 percent of 37 asset classes were in the loss zone. It was in 2017
the best investment year: only 1 percent of asset classes closed in the red area (all reports were made in dollars).

At the current price level, the accumulated cost of global capital and market value of bonds since the beginning of the year exceeds $ 5 trillion.
It's the biggest drop since the financial crisis. In 2008 the stock market fell by more than 18 trillion, according to Financial Times. Even though bonds were closed, they never closed that big "hole".

Key changes

Many observers appear to be the turning points in the current financial crisis. From 2008 to 2017, major central banks are investing in the balancing markets, which is in the search for high yields – a stronger demand for high risk assets in developing countries
or capitalized companies with high returns. Finally, the US federal reserve made more money than many experts, and the European Central Bank and its Japanese counterparts blocked their floods.

Fluid change dramatically changed market dynamics: dollar short-term investments provide up to 3 percent interest rate.
there is practically nothing. The effect of the dollar on the coincidence
removing more capital from emerging markets and weakening its currencies. At the same time, investors always diversify their risk – as a result, risks and returns on risks for doubtful creditors are rising. The yield of high yields is accompanied by a fall in prices.

Strong and frequent price changes

The yield of high yields is less attractive than approved investment. This is the case when global economic activity slows down and signs of slowdown in corporate income growth. Both investors are also skeptical: whether the reserves still take into account the tragic and uncertain outlook, despite the post-adjustment situation.

Uncertainty among players in the market is not reflected in the wave of market waves exchanges, In the middle of November, S & P 500, the most important stock index in the world, can be counted 52 days if the experience of price fluctuations over plus / minus 1% during one business day. Thus, the US stock market has returned to the long-term average – this is a super-investment year written in 2017, which means that the price fluctuation over eight days exceeds the 1 per cent mark. These times are so fast that they are so much more likely that one of the most reliable predictions for the coming year. (Editors Tamedia)

Created: 28.11.2018, 15:44 hours

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