U.S. elections stimulate stock markets
The list of current uncertainties is long: sluggish growth in the euro zone, doubts about the
robustness of the Chinese economy, a new slowdown in the economic growth of the U.S. and Japan, uncertainty about the condition of Greece, Spain and Portugal. These risks can be slightly
completed by other economic risks. The good thing about them is that they are known and in the media they appear again and again. From a psychological point of view, therefore, according to wealth managers Cédric Spahr there is little reason to panic. The uncertainties are in the minds of market participants and thus they are priced in the financial markets. «Panic usually comes from unexpected shocks," he explains. Known risks, meanwhile, provide much to talk about and represent the guiding line.
High risk aversion among private investors
That had led this year among the private investors to high risk aversion. They preferred to stay away from the stock markets. The recent announcement by the European Central Bank and the U.S. Federal Reserve to buy bonds on the market, have provided for more risk appetite. "The question now is if it about a turnaround in risk aversion and investors will gradually enter into shares again, "says Cédric Spar. This question can be answered with the help of some guidance says Spahr. The major central banks of the world continue to run their printing presses to mitigate spreading of the debt crisis. A generous supply of liquidity has been in the recent years a important support for the equity markets. This should also apply to the future. However, market participants had expected the measures announced in September and thus they have partially anticipated them. The long-term effect will therefore turn out milder than before. "Seasonal cycles should support equity markets from mid- October until into spring 2013 and provide for modest gains. " As reason refer Spahr to the U.S. presidential election, which should cater till year-end for a positive environment. "Statistically, the stock markets do better during U.S. election years. Once the outcome of the election is beginning to emerge,historically mostly to mid-October, the markets consolidate, "says the financial expert. The Chance that the risk aversion is facing a trend reversal is thus greater than the risk, according to Spahr,that risk aversion will continue to be high. For Spahr the next few months offer some opportunities for equity exposure. A weakness should begin from the coming spring 2013, this outcome is supported by the own cycles analysis. "This is supported as well by the U.S. election cycle. The first year of the presidential election is statistically a difficult trading year. "
Moneycab – 11 October 2012