“Go for a business that any idiot can run – because sooner or later, any idiot probably is going to run it.” – Peter Lynch
Pfäffikon SZ, Switzerland – There are roughly three reasons that explain the recent sell-off. First, investors are worried about the inverting yield curve. Many market gurus translate this into an upcoming recession, but this is premature. Secondly, there are trade strains between the US and China. Thirdly, investors think that the peak in the economic cycle is imminent, partly motivated by the aging bull market.
Investors would do well by making their investment decisions based on changing fundamentals rather than an erratic price development. The economic foundations are still intact and, therefore, patience is required. Volatility is sold as a risk, but it is not. 2019 promises –again– to become a volatile year for investors because the central bankers are slowly taking their hands off the market.
The Fed’s interest rate decision will be the coming week. The decision itself will not be a surprise; it’s all about the explanation and choice of words.
This is the last weekly outlook of 1324 | by Thirteen Asset Management AG. It remains us to wish you good holidays and a prosperous 2019.
This material is communicated on December 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.