“It’s waiting that helps you as an investor, and a lot of people just can’t stand to wait.” – Charlie Munger
Pfäffikon SZ, Switzerland – Last week, Americans went to the polls, and they voted for an impasse. The stock market initially reacted relieved, but investors returned to earth last Friday. This confirms that the long-term impact of the election on the markets is rather small. Historically, bull markets have done well during a stalemate in Washington. In any case, Wall Street seems happy that the uncertainty of the elections is over.
The battle around the 200-DMA of the S&P 500 is –as expected– still in full swing. One technical analyst predicts hell and damnation, the other only a correction in an upward market. The economy cools down somewhat, but it does stay on a sound and high level. There are hardly any indications for a recession. Price/profit ratios seem attractive; the market has, in any case, become cheaper.
It should be noted that this image is distorted. The S&P 500 is structurally overvalued on the basis of other valuation principles but ignored by investors for the time being. Heart of the matter is that the bull market is still intact. There is no question of hysterical euphoria, which often marks the end of the bull market. Shares are and remain by far the best asset class for the long term.
Monday is Veterans Day in the US which will probably mean a quiet start of the week. The rest of the week, it mainly revolves around macro figures and inflation.
This material is communicated on November 11, 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.