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HISTORIC VOLATILITY for 27 years :
First, we posted alerts on August 7th and November 23rd 2017 (French part of the Website) where we emphasized the low volatility on a long period of time.
Here we are ! Beginning February, votality regained momentum for the first time since beginning 2016 and stayed high.
What does it mean ?
It means that for an unexpected reason stock markets were surprised and an emotional reaction ensued, like the reaction a human being would have.
What was the main reasons ?
Shareholders realised that interest rates would go higher with a global economic improvement, especially in the USA and Europe. This factor was taken into account in February instead of last year, probably, because of a high euphoria spreading into cryptocurrencies and stock markets.
In this context, companies with high Price/Earnings ratios suffered the most. The sectors that outperformed in the last parabolic wave were on the top of the negative performance list.
Strong economic factors, especially in Europe, might reassure shareholders in the next three to six months.
But, following this strong alert in stock markets, we suggest to be cautious and opportunistic along the bumpy road in 2018.
We strongly advise clients to get information from trusted sources and to build their own view of the economic cycle in order to act accordingly and to avoid losses by the end of 2018.
Swiss ProfilInvest may help you understanding the current situation in order to give you a projection of the asset classes. If you need it, we would recommend to click on This email address is being protected from spambots. You need JavaScript enabled to view it. whether you have any specific question or wish any advice.
Written by Jean-Pierre Riepe
February 12th, 2018
We wish you a prosperous year.
