Stock markets reach record highs
We reduce our allocation in equities to “neutral”
The summer is slowly coming to an end and many indices have reached record highs in recent weeks – however, we also see some clouds on the horizon. Find out here how we see the further economic progress and which developments we will follow more closely in the coming weeks.
How we position ourselves strategically: The monthly CIO Update analyzes the current market environment and reveals its background. It is presented by Dan Scott, Chief Investment Officer (CIO) Wealth Management, and Mario Montagnani, Senior Equity Strategist.
Our macro view as of September 2021
Following the stock market boom in the summer, we believe that many positive results have already been priced into current prices, and we are concerned about developments surrounding the delta variant of the Covid-19 virus or the increased regulatory pressure in China.
Despite our expectation of weaker economic growth, we still believe that investments in equities will pay off. The economic environment does not argue against the asset class, even if certain risks are foreseeable in the short term.
We currently regard a possible interest rate hike as unlikely. Until there are signs of a comprehensive recovery on the labor market, the Federal Reserve will have little leeway to adjust interest rates. The latest inflation data also give little reason to do so.
Overall, we are reducing our risk positioning and lowering our allocation to equities to neutral. We expect increased volatility over the next few months, which should offer entry opportunities.
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