Only those who forget the old rules, is now successful in the stock market

Is it about money plant, from pack professionals as Amateurs like ancient wisdom. "Be fearful when others are greedy, and greedy when others are fearful", is,

Only those who forget the old rules, is now successful in the stock market

Is it about money plant, from pack professionals as Amateurs like ancient wisdom. "Be fearful when others are greedy, and greedy when others are fearful", is, for example, quoted the old master, Warren Buffett. Also popular: "Today, people of all, know the price and the value of nothing." With this spell, originally created by Oscar Wilde, like to be made fun of apparently irrational valuation excesses.

spell for spell, can gather investors, so a hodgepodge of rules for the monetary system. But you come so far? All those investors who threw the old rules out of the window won, at least in terms of the assessment. The fact is that the paradigm of stock exchanges has changed. What was considered to be expensive, became flight to the "bargain".

for example, Amazon . For years, the E-Commerce lists giant at the top of the shopping. The stock had marked in front of the Corona Crash is only just a record. Then it went from there, at 2185 US dollars, up to 1626 dollars down for a while. In mid-April, this was 25.6 per cent fall a thing of the past was, ultimately, the rate doubled from the Low to the recent record high at 3344 Dollar (!) – that's how fast it can go’. Amazon 2.750,50 EUR -45,50 (-1,63%) Tradegate

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Amazon's price-to-earnings ratio (p / e) currently, more than 141 no investors itches apparently. Sure, Amazon can also be seen as a statistical outlier, an anomaly. Founder and CEO Jeff Bezos wouldn't be so fixated obsessively on growth, Amazon would probably already since years to huge profits and the p / e ratio would thus certainly not acceptable.

stocks to buy: With the old standards, a purchase value of paper

you can hardly find any yet, However, has changed the scale outside of outliers such as Amazon. At the assessment level, which is now the Standard, were turned over earlier investors smooth. As a rough guideline was long: A normal p / e ratio is between 10 and 15, everything is cheap, from 20's’sporty to reckless.

in other words: A stock is valued fairly normal, if the purchase price would be brought into one to one and a half decades in, at least on paper. Since a single year can distort the relationship easily, is often used in the Shiller p / e ratio (also CAPE Ratio is called). Here are the gains of the last ten years are averaged and then with the current rate matched.

It shows quickly Who is invested with the rules of Thumb from earlier, is hardly a "normal rated" paper. The p / e ratio of the US-American indices S&P 500, for example, is currently 27, almost two times the historical average. Even more expensive old scales is following the Tech-index Nasdaq . Its p / e ratio is currently at about 31.

Nasdaq recorded a sky-high p / e ratio - and is the right choice

but it was still The Shiller p / e ratio of the Nasdaq 100 ranked even in the case of 46 – only a result of the Corona Rally? Not in the least. Already by the end of 2019, the Shiller p / e ratio of the technology indexes was over 40, as well as the end of 2017 to mid-2018. Even after the miserable stock market of the year 2018, the Nasdaq 100 p / e was 20, the Shiller p / e ratio is still at 35. Means: Even then, to be a looking back, cheap entry point, investors entered the "" overpriced. Nasdaq 100 10.893,74 PTS. -58,33 (-0,53%) Nasdaq Global Indexes

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The Nasdaq-100 would also be clearly the best choice, then, as now. By the end of 2018, the Index was trading at just under 6330 points. By the end of 2019 he went on 8733 counter, a Plus of 37.9 percent. The S&P 500 did over the same period "only" 28.8 percent. Who has set in the current year on the Nasdaq 100, the S&P 500, on a Year-To-Date gain of 21.9 percent. The S&P 500 recorded year-on-year is still minimal in the Minus.

The wrong decision in the case of the Index selection has cost investors this year, so let's just 22 percent rate of return. Traditional standards of evaluation have led to the de facto inferior investment decision. But it's not just Tech stocks can seem to be getting more and more expensive, which is allegedly already "expensive". Also at the market, broader indices such as the S&P 500 expensive is not always expensive, and cheap is always cheap.

"Sizable yields are not out of the question, just because valuations are overstretched"

This shows a data analysis of the US-analyst Ben Carlson. The S&P 500 has performed even at a relatively high Shiller p / e ratio of 25 in the following decade, an average 4.22 percent annual return, in the best case, even 9,28 per cent. The data show that the annual Performance is more than a decade on average to be higher, the lower the Shiller p / e ratio was the start time. One hundred percent reliable but price-earnings ratio is the Shiller – the entry in a "more expensive" market can be more profitable than a "cheap" market.

Carlson himself points out that even steep-rated markets profitable in many cases. In 42 percent of the time periods, to the beginning of the Shiller p / e ratio of the S&P 500 between 20 and 45, it came subsequently to annual returns of about six percent. Bernecker exchange - compass orientation for your Depot. Clear. Compact. Competent. (Partner offer) Now for 30 days completely free trial!

"Sizable yields are not out of the question, just because the valuations are a little overstretched," said Carlson, and warned that: "history suggests that we should expect after this strong run of below-average returns. However, in the case of the financial markets, nothing is guaranteed. There are simply too many moving parts that determine the result in the end.“

Megatrends, political factors are Meant to be with these Parts, business cycles, and, of course, monetary policy. The should have had in the recent past, even the most important influence on the courses. Because of the Corona-crisis, the interest-Keeper to be your money flood and the Zero - and negative-interest-rate policy of previous years retained even longer. The so-called "Dot Plot" of the US Central Bank, the Fed, shows that virtually all the decision-makers expect there to 2022, interest rate levels remain unchanged (an Overview of this and the chances of Interest rate hikes it here).

comparison of interest shows that shares are not expensive

considering the level of interest rates are not overvalued shares, even once, to a friend, the chief investment strategist of Deutsche Bank, Ulrich Stephan,. The equity risk premium index: "This measure is also in the focus of many investors, since it quantifies the difference between the earnings yield of equities and the risk-free interest rate such as the yield of Federal bonds. Thus, the assessment is set to direct relative to alternative fixed-income investments.“

The result, says Ulrich: "The equity risk premium is located in the historical comparison, approximately on the average level of the past ten years. Means: In a direct comparison to bonds, these indices are not overrated and expensive.“ The expert advises therefore: "so if you want to create money, should take into account not only individual valuation models for its decision, but several indicators into consideration, in order to assess the attractiveness of an investment." With the stock recommendations of the Bernecker exchange-compass, you can get more out of your money! (Partner activity) 30 days free to try!

This should currently be the only rule, the investor should take to heart - anyone who relies on a single title, should deal with the paper as with the group behind it apart, and from different angles with different metrics to the evaluation of look. Because, as Ulrich's analysis and the historical values show, is not "expensive" is always expensive. And ever: For years, pontificating skeptics that stocks are too high. But that didn't stop the courses so far, to storm up, not even in a pandemic. The crypto-Euro comes from? ECB could be criminal interest rates, then Comes easily by pressing FOCUS Online the crypto-Euro? ECB penalty interest easily by pressing

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Updated Date: 21 July 2020, 14:26

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