Robert Halver’s column: Now is the right time to introduce “crowd capitalism.”
Savers are celebrating the return of interest rates and scoffing at poor stock performance. Stock market years like 2022 offer the best opportunities. This should be taken into account not only by individual investors, but ultimately by politicians as well. According to stock market expert Robert Halver, what is needed now is “popular capitalism” like in Sweden.
“It’s good that I don’t have shares” and “Finally there’s interest again”, which I had to listen to again and again this year. After what seemed like an endless bull market and zero interest, the 2022 will be the tipping point. But have interest-paying securities really regained their luster and stocks lost their long-term appeal? Equity risk will also be a part of stock exchanges in the future. On the other hand, grass has grown in the garden of financial markets.
Nominal interest rates are not real interest rates
Wow, there’s interest again. But how attractive is this asset class when you take a closer look. Are government securities really risk-free? Can America, the Eurozone countries or even Germany ever pay off their massive debts? It was a rhetorical question.
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But where is the credit risk premium? However, central banks, as agents of financial policy, do not allow this anymore, in order not to start a new financial crisis or Eurosclerosis. Monetary policy’s happy hour also includes persistently negative real interest rates, which help governments manage debt but whose interest savers pay with a loss of wealth.
Don’t throw a partial weapon into the grain of interest
In these difficult years, many may view a drop in share price as being pushed out of stock market paradise. But it would be a huge investment mistake to dump a stock just because of a common, albeit unfamiliar, consolidation.
The energy crisis and the war in Ukraine are definitely obstacles affecting Germany as a business location. However, the global joint-stock companies are not dependent on Germany with its infrastructural, energy-related deficiencies and absurd deindustrialization policies. The world of investing is big and colorful. alternatively have Asia and America are very attractive places that attract companies like migratory birds in winter.
Of course, in 2022 rising interest rates have reduced the high valuation of stocks, especially high-tech stocks, like a lawnmower cutting long grass in the spring. And promotions that offered too much foam and not enough beer were rightly punished. But the world doesn’t want to go back to the days of Fred Flintstone and Barney Rubble, so this sector offers a lot of potential.
About the expert:
Robert Halver is Head of Capital Market Analysis at Baader Bank.
Overall, the global inflationary storm has subsided, even if the absolute price level remains high. However, according to the central banks’ new slogan “The road to inflation is the goal of monetary policy”, it will also slow the pressure to raise interest rates and thus do less damage to the (global) economy, including emerging economies. The zero covid policy remains The Chinese disability. But domestic economic pressure on the still very stubborn Xi Jingping is likely to increase to at least relax in the future.
All this also benefits ailing, economically sensitive German stocks, whose earnings and asset valuations show clear value characteristics. Companies in the infrastructure sector are also benefiting from a large investment backlog over the past three years as a result Corona and the Ukrainian war. Climate protection and related investments also play an important role here.
And then there are the payouts. They can replace the classic compound interest effect with dividend reinvestment. This is a new additional income in old age. Pressured by large pools of capital, they are no longer just extra income, but an increasingly filling meal. High dividend stocks also have a price stabilizing effect.
Of course, stocks will continue to fluctuate as…