Düsseldorf – 2016 was a year full of political turmoil and uncertainty in the financial markets. The investors have also felt that. “2016 is a lost year for investors,” says Frank Wieser, Managing Director of PMP Vermögensmanagement in Düsseldorf. “A modest return faced large fluctuations and even more uncertainty.” And many of the uncertainties persist. It should therefore be clear: 2017 will not be a good year for investors with weak nerves.
However, there is no reason to panic in general now, says Wieser. “Many big crises have been known for years, and the world has not gone down.” Niels Nauhauser agrees similarly: “Markets are constantly living up to challenges,” says the financial expert at the Consumer Affairs Center Baden-Württemberg. Many developments have already been priced into the prices of the stock exchanges. Therefore, there are usually no large price fluctuations, if the expectations are then met.
Interest rate increase with little effect so far
An example of a rate hike: At its mid-December session, the US Federal Reserve raised interest rates again by 0.25 percentage points to a range of 0.5 to 0.75 percent. However, this did not cause much movement on the markets, as the financial traders had expected this step worldwide. The news that the key interest rates in the US continue to rise in moderate steps has also arrived in the markets.
However, key interest rates in Europe remain low. And in the opinion of many experts for the time being 2017 will not change anything fundamental. The European Central Bank (ECB) could not fundamentally escape the turnaround in interest rates in the US, says Claus Walter of the Freiburg Vermögensmanagement GmbH. “On the other hand, it can not ignore the budget problems of the southern European countries.”
Return only in risk
Security-oriented investors are thus in a quandary. After all, they can only achieve returns with riskier forms of investment. If interest rates rise, this has an effect on bonds: “When interest rates rise, prices fall”, explains Nauhauser. The reason: for the old papers with lower interest rates, the demand decreases. “An interest rate hike of 1 percent in all maturities means a 10 percent loss potential for long-dated bonds,” adds Ingo Schweitzer of Anceka Vermögenssbetreuungs AG in Kaufbeuren. “The plant should therefore be short to medium term.”
Even with flexibly interest-bearing investment forms, there is still little to gain. According to FMH, there is currently only about 0.2 percent interest on call money on average. More is available only for time deposits. After three years, according to FMH at least up to 1.75 percent interest rates are possible (as of December 13, 2016). However, autumn does not recommend too long-term investments. “It’s better to keep the money liquid.” In this way, investors can react to changes.
2017 also rather uncertain
And that can be exactly the right strategy for the coming year, because 2017 will probably be a rather uncertain year. “It’s a year with many question marks,” says Kurz. “Especially the first half of the year should be uncomfortable, because important political events are closely packed,” adds Wieser. Following the introduction of Donald Trump to the post of US President, elections will be held in Europe, for example in France and the Netherlands, and in Germany in the second half of the year. The outcome is uncertain. “There may be significant fluctuations,” says Wieser.
For investors, this must not only be bad, says Jürgen Kurz from the German Association for the Protection of Securities (DSW) in Dusseldorf. On the contrary: “If the prices give, you can buy cheaper.” This can also pay off for investors who have set up a savings plan.
“The best moments to invest are those in which nobody wants to buy more shares,” says Patrick Cettier of Prio Partners Asset Management in Zurich. “Those who patiently wait for panic in the markets and then strike when everything is on sale will be rewarded in the long run.” However, investors need a certain amount of risk-taking and strong nerves.
Less risk-tolerant investors may not have to do anything at all. “If you have spread your money across different asset classes, you do not need to be afraid of falling prices in principle,” says consumer advocate Nauhauser. “It always depends on the long-term development.” Kurz sees exactly the same: “Political stock exchanges have short legs,” says the investor protector. However, savers should pay attention to their personal investment horizon: “If you need the money in two years, you can now build your cash position in case of doubt.”