What happened in March ’19?
April 10, 2019 | Latest News
The first quarter of 2019 is already over again and the worries from quarter 4 of 2018 seem to have long been forgotten. Investors who have sold their assets in panic or distrust or who did not dare to reinvest will surely remember the worst stock market December since 1933.
Were we right in December?
You might remember: In December 2018 we wrote a small article about it, “The snow is trickling quietly, the markets are crashing loudly” and explained why we are staying invested – which is why we will even be looking forward to bargains. Fundamentally analyzed, many top companies had a nice Christmas discount. If you bought quality here, you could look forward to a full recovery in the share price. But enough advertising on ur own behalf – so what happened?
The irrational trader
The short-term stock market movements suffered once again from the notorious Mr. Market. An irrational, emotional trader who is led by political anxiety scenarios. A market participant who speculates on price movements and believed that the charts would go even lower – stock prices would fall. Like Mr. Market, most investors have responded. Panic selling and speculation-driven security sales eventually led to global price declines. The avalanche started rolling. The oil in the fire was the Brexit debate, a slowdown in global economic growth and a trade war between China and the US. In addition, we keep hearing that the markets have been in an uptrend for so long that negative stock market years are inevitable.
Got off too late – got on too late
For most companies, the first quarter of 2019 meant publishing their annual financial statements or quarterly results. The prices on the markets had already fallen and now the results were presented. What did they see? The figures were often good, even excellent. Who knew about it? Some had anticipated this and remained invested. Some looked at the numbers and got back in. Those who still didn’t trust the market or didn’t know the numbers were at the bottom of the league. So they bet on the price development and then got back in again – after a large part of the recovery rally had been over. The speculator sold and bought. So he took losses with him and missed a large part or even the whole recovery – frustrating. And predictable. That’s why: Forget the charts. Stay invested as long as you are convinced of the company and its future growth. Not because of a feeling, because of the fundamental data. Of course, trust and expectation in the management, the owners and human factors also belong to it. But the entrepreneurs have also earned these through their previous actions and the skills they have demonstrated. You are welcome to read more about this in our whitepaper.
So if you ask us what the markets will bring this year, we’ll tell you: We don’t know – but everyone else doesn’t know either. So what we do is analyse, make decisions thoroughly and on this basis.
Our recommendation: Do not speculate on market developments, but invest with us – we would be delighted!
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Just 6 out of 51 asset managers succeeded in convincing with an above-average performance in the Benchmark Test III of the Fuchsbriefe publishing house. The portfolio managers of our parent company Früh & Partner can count themselves among the big winners.