“Although the sharp rises and falls are disturbing, investors should not sell holdings in a panic,” says Michael Strobeck, chief investment officer of Swiss bank Credit Suisse. According to him, even in a market where there is a lot of volatility, it is forbidden to drive hastily and abandon, and one must remain invested in the market.
“Even in a volatile market where the risks of recession are still in control the financial markets offer a positive return potential,” Strobek said. “Once real returns peak, there is potential for a rapid recovery in the markets, and investors leaving now will probably miss it. Predicting the stock market from one day to the next is almost impossible, but uncertainty decreases over a multi-year horizon. For a period of three or five years, we can “To say with much confidence that stock markets are likely to be high. Examining the real-time horizon of a portfolio can help investors stay spot on in times of increased uncertainty.”
Strobek explains that the central banks have a delicate balancing act. “They need to engineer an economic slowdown without causing a complete recession. They are committed to fighting inflation, but they can not fix supply-side problems. So real interest rates are rising. As long as supply is limited and demand is strong, central banks will remain interest-bearing hawks.”
“There are first signs that the policy is working. For example, inflation rates have apparently peaked so far and the implied inflation expectations in the market have also dropped recently. Consumer confidence has also declined, and yet the overall economy (especially the services sector) is still stable enough and a recession is unlikely in months. The next ones. ”