be part of crises to the economy, but they often have their peculiarities. So it is with the Problemmix the corona pandemic: the demand – and supply-side conditions at the same time in a pincer. On the one hand, private consumption collapses, because shopping centres, Restaurants and leisure facilities will be closed. On the other hand, the production suffers, because the supply chains are interrupted in many Places. About the author
Daniel Evensen, the responsible editor of fondsmagazin.de
And so the mood in the German economy on a low point is dropped. The ifo business climate index, a survey of 9,000 companies, suffered in March with a decline of 8.4 to 87.7 points. “The drop tops everything we have so far in the history of the indicator is seen,” says Deka-economist Andreas Scheuerle.
Ifo Index, just above the historical Low
The ifo Index is only slightly above its historic Low of 84.6 points in December 2008 – during the financial market crisis. At that time, the German economy slipped into an unprecedented recession, the gross domestic product shrank in 2009 by 5 percent. With similar dimensions to the evaluation of the Deka-economists is to be expected now and again – with the forecasts due to the unpredictable course of the corona of a pandemic with many uncertainties.
For investors is the comparison with the financial market crisis is important for another reason: The DAX broke in 2008, as strong as rarely before, in the recession year of 2009, he finished with a clear Plus. The reason is that In the stock prices developments will be taken in the future, often six to twelve months in advance. Investors are pricing in recessions, but also the end of the lulls, at an early stage.
All the developments on the stock exchanges: News-Ticker to the Corona Crash
a panic mood on the markets
How pessimistic market participants assess the economic situation currently is already, show not only recurring exchange losses on the Dax and the Dow Jones Industrial by more than five percent in a day. Also the indicators for the mood of the investors indicate great fear, even panic. In the past, to the times of the sale, the price low, often not far away. Because as soon as in a crisis situation, the first silver lining on the horizon appears, can take advantage of stock prices, in turn, a General improvement is anticipated.
Extreme fear in the markets
funds magazine Extreme anxiety in the markets, The Fear & Greed Index (fear & greed Index) in the news channel CNN, the state of mind of the investor measures on the basis of seven key indicators. In mid-March, all individual indicators were at “extreme fear”. In the case of an index value below 10, it can be assumed that many of the market have sold to the participants. The mood lightens up eventually, easily, could return again reinforced investors in the markets.
“The infection figures to play a Central role, because they determine the extent of the quarantine measures and their duration,” says economist Scheuerle. “These two factors are also fundamental to the economy.”
you look at the cycle of investor emotions, then an exit from the stock market is at the stage of panic is a bad Option. Because at this level the shares have already lost much of its value and investors would miss out on a subsequent recovery. Who aussitzt the price low, is also when the next upswing again. The risk-loving natures to be able to use the panic of the other to anti-cyclical – that is, against the Trend of the items to be added or removed. So cheap, you can have some share in the future, tend not to buy more, if the
All the information about the outbreak of Coronavirus: Coronavirus outbreak in the News-Ticker
use the most wide-spread
The Deka believes that the time is, however, too early to with full commitment on the shares. Deka-economist Scheuerle: “But of strategies of Entry in the Form of disciplined acquisitions can be started in the coming weeks.” Thus, investors should diversify as broadly as possible, since not every company will emerge stronger from the crisis. With Fund-based savings plans, investors can easily invest regularly in diversified equity portfolios.
The cycle of investor emotions
funds magazine, The cycle of investor emotions After a time of great optimism until February 2020, the share markets go through in the meantime, in a rush, the stages of concern and Anxiety. If investors come afterwards, in a panic, and, exasperated, throw in the towel, is often a good time to get started in the stock market. However, the duration of the lows is difficult to predict.
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