“Volatility is not the same thing as risk, and investors who think it is will cost themselves money.” – Warren Buffett
Pfäffikon SZ, Switzerland – Many gurus and analysts have no difficulty in explaining the recent sell-off. In general, the accrued interest is designated as the culprit; however, this approach is too simple. The US housing market is under pressure, which makes investors nervous. Additionally, the (hard) Brexit, the Italian budget problems and the falling oil price affect investors.
Nevertheless, the current situation can not be compared in any way with 2008 or 2000. In summary, bonds are in a bubble and shares are not. Despite the recent declines in other asset classes, gold still does not escape from its long-term bearish scenario. For investors in this asset class, this isn’t a good sign. History teaches us that the shifting competition between the various asset classes is of a temporary nature. Also, it is forgotten that this moment is an excellent opportunity for the highly liquid business sector to buy back their shares cheaply. We would not be surprised if the current bull market would last at least five years.
Therefore, the current correction can still be labeled as noise. “Buy the dip” is the scenario despite the hefty beating. As long as the bull market is intact, there is no reason to be nervous and adjust long-term investment scenarios.
The new trading week is once again full of quarterly figures.
This material is communicated on October 28, 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.