“A lot of people with high IQs are terrible investors because they’ve got terrible temperaments. You need to keep raw, irrational emotion under control.” – Charlie Munger
Pfäffikon SZ, Switzerland – The Fed wants to fuel inflation for a variety of reasons. Moreover, when the Fed wants something, it happens. If inflation takes shape, the Fed will eventually intervene with further rate hikes to allow the economy to cool down and reset. The market could eventually turn into a bear market. We are still far from this end station. After all, there is hardly any inflation, and the economy is running correctly. A point of attention is that valuations are disproportionate in different aspects.
Investors have been busy lately about peripheral phenomena. The impact of threatening trade wars and shifting currencies is limited for the time being. It will probably take months before there is clarity about the tense relations between the economic power blocks. The fact that the S&P 500 is consolidating at such a high level is in our view a powerful (upward) signal.
In the coming week, the agenda will be mainly about interest rates.
This material is communicated on September 16, 2018 by 1324 | by Thirteen Asset Management AG, Rietbrunnen 20, 8808 Pfäffikon SZ, Switzerland. This material is for information purposes only and is not intended to be a solicitation or invitation to invest. Any organizations or products described in this material are mentioned for reference purposes only. This material is intended only for investment professionals and professional clients and must not be relied upon by any other person. It is proprietary information of 1324 | by Thirteen Asset Management AG and may not be reproduced or otherwise disseminated in whole or in part without prior consent from 1324 | by Thirteen Asset Management AG. Alternative investments can involve significant risks and the value of an investment may go down as well as up. There is no guarantee of trading performance and past or projected performance is not a reliable indicator of future performance. We recommend to consult your bank, investment and/of tax adviser.