Reaction to the high waves on the stock markets

The initial financial market euphoria about the new, old US president has subsided. Tariffs and a possible economic isolation of the USA are weighing on the financial markets.

The current momentum shows how quickly the mood can turn. From mid-December last year to mid-February this year, the stock markets once again only knew one direction: up. Now comes disillusionment. The assumption that the new US government would provide stability gave way to reality - and with it came price falls.

Markets are volatile, that cannot be changed. The decisive factor is how you are prepared for it. In view of the positive stock market developments in the medium term, it was already advisable to critically review the investment strategy in the fall of the previous year and prepare for changes. Gutmann did this in October of the previous year by reducing its equity allocation. From today's perspective, this was the right decision.

In phases of increasing uncertainty, the strength of the Gutmann strategy becomes apparent. It is broadly diversified and ensures stability and resilience - even in strong waves. In our monthly chartbooks, we have examined the impact of tariffs on individual business models in the Gutmann equity strategy. We also analyze the extent to which companies are affected by the changing developments in the field of artificial intelligence.

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We do not comment on political developments. Our focus is on economic effects - sober and fact-based. We analyze the consequences for financial instruments, sectors and individual companies in the portfolio. We look at both bonds and equities. It is crucial to separate the wheat from the chaff. Accordingly, investments should focus on the quality of the companies and not the current market sentiment.

It is impossible to predict how deep the current correction will go. A prolonged bear market cannot be ruled out either. In such a scenario, large technology stocks, whose prices have risen at an above-average rate in recent years, would probably be particularly affected. As a general rule, those who avoid cluster risks in their investments will generally fare better. The key is to stay invested. If you allow yourself to be unsettled by short-term market turbulence, you will miss out on long-term opportunities.