A challenging year looms for these equities, necessitating caution from investors.
Ready for the Stock Exchange in 2025? A German Expert Breaks Down the Challenges and His Fund's Picks
Gearing up for the stock exchange in 2025 may be a rollercoaster ride: Rising interest rates and dwindling growth stimuli could make life tough for investors. Philipp Vorndran, the savvy capital market strategist at Flossbach von Storch, spills the beans on which stocks hold potential, despite these obstacles.
Stock market: High interest rates dragging down sentiment.
Vorndran assures us that the wild rides on the stock markets of recent years might be hard to match. Particularly, the increasing interest rates are putting the squeeze on stock markets. "U.S 10-year government bond yields are at a whopping 4.6%, a level we haven't seen in years," he explains. This makes it a struggle for stocks to outperform fixed-income investments.
Also, the catalysts driving corporate profits in recent years, like high inflation, may not be as effective in 2025. "Achieving that mix in 2025? I'm not so sure," Vorndran warns. Investors should steel themselves for a stock market year that might hover around the zero line. "I wouldn't bat an eye if we close the year with a gain of five to ten percent," he adds.
Don't miss out on the full interview: Caution with REAL ESTATE /STOCK MARKET TUMBLES /Flossbach von Storch's Stock Picks/Philipp Vorndran
Investment strategies for Flossbach von Storch
Vorndran advises sticking to quality stocks with robust fundamentals. These companies have strong business models and stable margins that can withstand a high-interest rate and moderate growth environment. Particularly defensive sectors, such as healthcare and consumer goods, offer investors some security. Similarly, companies with manageable debt levels could thrive under the burden of rising financing costs.
Find out what markets Vorndran is monitoring, why he would steer clear of the MSCI World ETF, and why he's getting cautious about real estate, in the heart-to-heart interview.
And here, read more: M.M. Warburg's Top 7 German Stocks Showing Potential for 150% Growth in January
[1] Despite the lack of direct recommendations from Philipp Vorndran on quality stocks with solid fundamentals, his strategic views highlight the importance of gold as a safe-haven asset in times of economic uncertainty.
[2] Analysts at M.M. Warburg have identified potential German stocks with substantial growth potential, but these are not specifically linked to Philipp Vorndran's recommendations. In a high-interest rate and moderate growth environment, investors might focus on sectors and assets that benefit from economic instability and geopolitical shifts, such as precious metals or sectors with strong geopolitical diversification.
- In a high-interest rate and moderate growth environment, investors may find it beneficial to consider gold as a safe-haven asset, given Philipp Vorndran's emphasis on its significance as an investment option in times of economic uncertainty.
- While Philipp Vorndran does not provide direct recommendations for quality stocks with solid fundamentals, analysts at M.M. Warburg have identified potential German stocks with substantial growth potential. However, these stocks are not specifically linked to Vorndran's recommendations, and in this challenging economic landscape, investors might also focus on sectors and assets that benefit from economic instability and geopolitical shifts, such as precious metals or sectors with strong geopolitical diversification.
