Thoughts on the current situation
When I look at the S&P500 or Wall Street, we are experiencing the biggest turnaround since 1985. This year, you have lost more on long-dated government bonds than you have on the weak S&P500.
The private investors are in a shock paralysis which is kept by various channels and statements like "you have to think long term" or "it will be alright again" - which is also confirmed by Bank of America. The spark of hope according to the "Heile Heile Gänsje principle" has not yet been lost by private investors, i.e. panic has not yet broken out. If this times entry I hope you have the right broker that works. If we get a bear market rally, then the lows are not yet reached this year.
European equity funds have been making continuous capital withdrawals for about 12 weeks. In the US they have only started doing this in the last 4 weeks.
Historically, there have been about 20 bear markets in the last 140 years, with an average decline of 40%. The bear markets lasted on average about 300 days. If we apply this to the current situation, we can expect the end of the bear market at the end of October. I then see the S&P at about 4,000 points and the NASDAQ at about 3,000 points lower than today.
Historical considerations are always relative, but hey, why are you here, because you calculate a chance for the future of your capital on the basis of historical return considerations. I think the reverse conclusion must be allowed as well.
If we take a look at the NASDAQ stocks, half of them are already below the 52-week high. The statistics can be continued at will and spread bad mood what is not my intention. In my opinion, much is already priced in here. Keep in mind, however, that bear markets historically do not just end overnight and especially not in the short term.
Our ECB, as driven by the FED, must now react and the market has directly incorporated the 3 expected interest rate increases. Australia, India and Chile or their central banks are also getting into the mix. Growth warnings from Germany do not make the Americans positive. The increased zero tolerance policy of China in conjunction with the cooling economy are not optimal omens. This can be well observed at Starbucks, Adidas and Nike.
For me, the question is "do I buy stocks cheap now" or "do I jump behind a falling knife now". I can support the counter argument that in X years everything will be good again. What is not answered, however, is how long I need to recover from falling prices and a jumping behind the bottom line. My objective is finally to achieve a profit.
