Investors should stay cool like the pros

Bull and bear in front of the Frankfurt Stock Exchange

Due to the uncertain situation due to the corona pandemic, share prices are currently fluctuating very strongly.

(Photo: dpa)

The stock markets are not finding a clear direction: after the leading indices in Europe lost almost three percent on Thursday, they jumped up again at the end of the week. Investors also stand between fear of renewed restrictions on society and the economy due to a massively spreading corona pandemic and hope for an antidote. Investors are also concerned with the unrest before the presidential election in the world’s largest economy, the USA, which has been extremely affected by Corona, including the scramble for aid worth billions of euros for companies and consumers.

But private investors could take a look at the coolness of the professionals these days. Hedge fund and classic fund managers take advantage of weak stock market days. They stock up on cheaper stocks to which there is no alternative in the interest-free world. That quickly drives stock prices back up until the next bad news comes. Investors are caught in this ups and downs: The V-Dax volatility barometer is sometimes twice as strong as in normal times.

The professionals, however, apparently do not let their optimism spoil. They expect the economy to continue to recover. Few expect the recession to last another twelve months. This is the result of the highly regarded monthly survey of around 200 international fund managers who manage assets in the mid three-digit billion dollar range. This month, however, the results of the survey were only made public through a message from a bank: There was no direct publication this time for no apparent reason.

Hope for a corona vaccine

Accordingly, the major investors see the pandemic as the greatest risk for the markets. But most expect that a vaccine that makes the pandemic manageable will be approved by the first quarter of 2021 at the latest.

Quarrels surrounding the US election, which most professionals believe will contest the results, are not preventing hedge fund managers in particular from betting significantly more on stocks than they did in September.

If you have the nerve, you can imitate the pros after setbacks. Under no circumstances should you be tempted to throw your shares out of the portfolio entirely. In any case, it is advisable to regularly convert price gains when stocks have run up. Because nobody knows when the markets will correct more strongly. And such profits are easy to invest again afterwards.

More: Which stocks could now stabilize the portfolio


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