Saturday , October 23 2021

We may have one or two years to the crisis – Market & Profit


This year, bonds and bonds are also badly performing, so many have been hampered for another recession. However, in view of the economic climate, we are still in the recovery phase, so it can take up to 1-2 years until the economic downturn – informed K & H Fund Management. But at the moment extreme movements and even smaller or larger losses can be expected, so investors should not look at the moment of individual assets, but the long-term profit in the entire portfolio.

This year, the bond market or stocks do not perform, and even negative returns can occur, so many people put the alarm due to another crisis. "Due to the economic nature of the economy, performance of the two asset classes is often different, or both are underperforming. It is therefore important to look at the picture in the long term and see where we are in the current business cycle: the current case is only a correction or launching bear market must be set. In order to respond to this, account must be taken of the performance of the world economy, central bank and the market process, "says Mátyás Kovács, senior portfolio manager at K & H Fund Management.

there may be a crisis

Can you just go down? – Picture: Pixabay

Economics results show a boom

With a growth of 3.7% in the world economy next year and 2.5% in the US economy, the eurozone today is poor, also an increase of 1.9%, indicating a clear upswing. At the same time, the rising labor deficit is also a warning sign for the cycle, but inflation is only just beginning, which in turn clearly indicates a mature recovery phase instead of a recession.

The Central Bank's steps show the end of the recovery

Although the Fed has been subject to ongoing interest rate hikes, the ECB will only complete its purchase program for purchases before the end of this year. This caution indicates that economic growth is already stable on the feet without the stimulus measures of central banks.

Markets price the boom

Similarly, stock market decline has occurred in recent years, so this is actually a correction, while in the long term there is still a rising trend. European bond yields are still on the bond market, but US interest rates are already rising, which is a special recovery phase.

"Overall, we see that the economy has always been cyclical and remains what we are now in the recovery phase. However, this may be for 1-2 years, so instead of panic, two things must be matched. On the one hand, strong exchange rate fluctuations remain with us, and On the other hand, one or more investments in this volatile market environment may show less or at least a lower profit than one two years ago. In this case, it is the smartest solution if we do not look at a single asset but want to make a profit on our long-term investment portfolio, says the investment expert.

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