A Ticking Time Bomb

Dear Ladies and Gentlemen

Please let me start this week’s edition of „Stefan’s weekly“ with a short administrative message on the publications front of Incrementum AG.

LinkedIn

I do not know if you know, but Incrementum AG has a LinkedIn account. If you are interested in reading regular posts from the partners of Incrementum AG, please feel free to follow us on LinkedIn.

Still no crash detectable

Ladies and Gentlemen, I receive many questions on how to invest and on if the market is going to crash and if we will see massive inflation. The fact is I can not foresee the future, but let me give you my point of view.
I know there is risk, i.e. volatility, in equities, and many companies‘ valuations seem expensive, and all major Dow indices (Industrial, Transport, Utilities) showed relative weakness in the last week, and I would not rush in and buy stocks across the market franticly, but if you see an opportunity, why not starting the building up of a position?

What is the alternative?

We see oil with unwavering strength, and the trend in the Nasdaq 100 futures remains up and if we consider bonds a no-go, where to put the cash? Well, first of all, I am a big fan of cash. When markets are shaky for a few days, weeks or even months, cash comes in handy and can help build up positions at reasonable prices. However, I am also a big fan of equities. Long-term, it makes sense to me to be and to stay invested in equities of companies producing positive cash-flows without trying to time the market too much. Market timing is challenging, and few people do get it right.

Risk Assets

In any case, investing in so-called „risk assets“ involves primarily the capacity of handling risk, i.e. the capacity of accepting volatility. People are different and thus feel different about accepting risk. That is why a portfolio should always be structured according to your personal desires, needs and your very personal risk appetite.

What is your way of managing assets?

Please, Ladies and Gentlemen, let me know about your experiences in asset management. What is important to you, and how do you handle risk? Do you think the market is a ticking time bomb?

… but please do not forget (instead of hitting the reply button) to send your messages to smk@incrementum.li

Many thanks, indeed!

Ladies and Gentlemen, I wish you an excellent start to the day, a wonderful weekend, and above all, good health!

Yours truly,

Stefan M. Kremeth