To everything there is a season ... a time to cast away stones and a time to gather them ...
Stock markets do not need a great economic environment to rise noticeably.
When reality succeeds in outperforming low expectations, a sustainable tailwind is created.
In this sense, the MSCI World Index managed to deliver a very good start to the year despite mixed data.
Given the abundant evidence that equity markets are "ahead" of the reportings, earnings performance is useless as an indicator of upcoming equity market performance.
Equity markets look ahead and price in the likely future of the next 3 to 30 months.
And as long as the "pessimism of disbelief" influences investor sentiment, equity markets will continue to receive tailwinds in the form of positive surprises.
Already at the beginning of 2023, the stock markets sent the first signals that the accumulated pessimism from 2022 was slowly subsiding.
As a rule, a sceptical phase follows, which may well last longer - and gives the stock markets a good chance to rise sustainably.
As long as expectations remain low, reality can surprise positively without much effort.
My thought on this: Maybe we are in such a phase right now...
It is possible that the current situation and isolated banking crises should be seen in this context. Don't let the panic reports drive you crazy, trade the market. Things do not look that bad (yet). It is possible that the opposite pole, the most favourable entry point, will be reached shortly.
->No trading advice, use your own judgement.
Stock markets do not need a great economic environment to rise noticeably.
When reality succeeds in outperforming low expectations, a sustainable tailwind is created.
In this sense, the MSCI World Index managed to deliver a very good start to the year despite mixed data.
Given the abundant evidence that equity markets are "ahead" of the reportings, earnings performance is useless as an indicator of upcoming equity market performance.
Equity markets look ahead and price in the likely future of the next 3 to 30 months.
And as long as the "pessimism of disbelief" influences investor sentiment, equity markets will continue to receive tailwinds in the form of positive surprises.
Already at the beginning of 2023, the stock markets sent the first signals that the accumulated pessimism from 2022 was slowly subsiding.
As a rule, a sceptical phase follows, which may well last longer - and gives the stock markets a good chance to rise sustainably.
As long as expectations remain low, reality can surprise positively without much effort.
My thought on this: Maybe we are in such a phase right now...
It is possible that the current situation and isolated banking crises should be seen in this context. Don't let the panic reports drive you crazy, trade the market. Things do not look that bad (yet). It is possible that the opposite pole, the most favourable entry point, will be reached shortly.
->No trading advice, use your own judgement.