Monat: Oktober 2018

Dear Ladies and Gentlemen

Many thanks for the encouraging messages I received to my last weekly mail containing a link to the latest edition of our Incrementum Crypto Research Report. My colleagues from the Incrementum Crypto-Team have again invested a lot of time and effort to make it a worthy product. If you have not had the chance to look at it, maybe you do want to spend a moment to do so over the weekend, I think it is well worthwhile.

Now, for this week I would like to look at what is happening at financial markets right now. You know, the large European indices don’t look so cool with the SMI being down 7.92% so far this year, the DAX down 10.67% and the EuroStoxx standing at minus 8.41% year-to-date.

What is happening you may ask. Is this just a healthy correction, a crash or the beginning of a bear market?

First, I personally think there is not much wrong on the corporate side. Almost all companies we are screening have reported decent numbers so far this year, some of them even reported very good numbers.

Second, statistically the fourth quarter in U.S. mid-term election years, such as 2018, is usually a positive one for U.S. equity markets. Yet (and we have to keep that in mind) those statistics only show a picture of aggregated numbers and while the aggregated numbers may show a positive result over time, individual years may still be negative.

Third, investors are worried about higher yields. Large US bond ETFs have taken quite a beating lately.

Forth, the general news flow seems somewhat tilted towards the negative. According to mass media we seem to see more and more tensions stemming from global political leaders and other global political forces.

Well, Ladies and Gentlemen, this somewhat kills the vibe, no? In such an environment, investors are just not willing to commit for the purchase of equities, investment funds, ETFs, etc.

…and to answer the initial question if this is just a healthy correction, a crash or the beginning of a bear market, I can only answer that: “I don’t know!”, as I can’t possibly foresee the future which I admit is a pity but nevertheless a fact.

However, if you are in the game for the long run and you have done your due diligence before investing and you are convinced to have the right stocks in your portfolio, during periods like this you may want to consider buying more of the same at lower prices.

…and it pays off to keep a reasonably balanced portfolio. For example, look at the performance of gold over the last few days. If you have a small allocation of gold in your portfolio it must have added positively to the total return during the last days and thus took some of the negative volatility out of your portfolio

Diversification helps during difficult times but in order to have a diversified portfolio for difficult times you may want to consider building it up while markets still look healthy.

And now, Ladies and Gentlemen, please keep in mind that I can’t foresee the future and whatever I am sharing with you in my weekly mails reflects my very own personal opinion and please keep on sharing your thoughts and ideas with me. Please feel encouraged to do so but please don’t forget (instead of hitting the reply button) to send your messages to:

smk@incrementum.li

Many thanks, indeed! Your comments keep me going!

And now, Ladies and Gentlemen I wish you a great day and weekend.

Kind regards.

Yours truly,

Stefan M. Kremeth
Wealth Management
Incrementum AG