Roland Stadler is already annoyed when he looks at his portfolio: The numbers behind the minus signs have decreased again, but 47,000 euros are gone from 310,000 euros. Disappeared in the Coronacrash. Now there are 263,000 euros. Stadler (name changed from red.) Almost sold a number of shares in February that he had inherited from his father two years ago. His feeling told him that the stock markets had just gone too well. Now the IT expert regrets not having done so. Stadler has just turned 50 and wanted to use his money to finance an earlier pension. The money would have been enough for nine years of early retirement – before Corona. Now does the virus upset all of its financial planning? Or his life planning? His big question is: How do I iron out the 47,000 euro dent in the depot?
For others, especially younger investors or young families who have not yet saved that much, the gap is of course not that big. Nevertheless, the crash in March left its mark on many depots. Although most indices have recovered strongly since then, the increases were very different depending on the industry and the type of investment. And the uncertainty remains great. In this situation Personal-Financial.com offers a guideline: Which rules continue to apply in the Corona world – and what has changed fundamentally?
But before that, it is worth taking a closer look at the events from the end of February to mid-March: It was mainly the large institutional investors (and their customers) who suffered from the crash. Because to protect themselves and because their trading systems automatically set this, many stocks from large funds came onto the market and the managers rearranged their portfolios. Instead, they hoarded cash or were looking for supposedly safe bonds, the industry sales statistics show. But given the big markups on bonds and measly interest rates, that wasn’t a good idea. So there is still a big minus in front of many actively managed funds.
In contrast, the majority of private investors left the money where it was. They went through the rapid crash as well as the miraculous recovery afterwards. Many even increased their savings plans or entered the market. “German investors were very level-headed and acted long-term,” says Hans Joachim Reinke, head of the Union Investment fund company. “There were no outflows, rather inflows.” Since the beginning of the year, almost 300,000 customers at Union alone have opened a new depot.
Cologne-based asset manager Maik Bolsmann also confirms: “It was primarily private investors who from April made sure that the stock exchanges experienced an equally spectacular resurgence after the spectacular crash.” Many large funds, on the other hand, still hold cash – because they expect another crash and wait for the time to return. Even flagship funds from Flossbach von Storch and Jens Ehrhardt currently only have an equity quota of around 40 percent. It is striking that, according to a Bank of America survey, every second fund manager assumes a U-shaped recovery, i.e. a longer dent. One in five thinks it will be a W, so there will be a second market crash. In contrast, only 15 percent still believe in a V, i.e. a brisk recovery.
The only thing that is certain is that the uncertainty remains. According to the Ifo Institute, almost every third company expects to have payment difficulties by the end of the year. Many companies are also likely to reorganize their production and supply chains, i.e. more locally. This could mean losses for exporting nations like Germany. But what exactly happens cannot be said, “especially since people tend to overestimate the long-term effects of certain events,” says Olaf Stotz, Professor of Asset Management at the Frankfurt School of Finance & Management.
Investors should use this situation for one thing: They should review their wealth building strategy – no time would be more appropriate. Security will play a major role in the reorientation, as will cash and courage. Regardless of what Corona will do in the economy: “The Basic Law on the capital market continues to apply,” says Stotz: “Investors take risks, and they are only rewarded to the extent that they do it.”
That means: If you want to avoid all risks now, you must also write off the earnings. And he will miss opportunities. Because fundamentally, the prospects for investors are never as good as after a crash. There are two questions to be answered: How much risk can I take? And which system do I get for this? These two questions determine when you have ironed out a four or five-digit dent in the depot.
# 1 Stick to your beliefs
Especially during the crisis, investors notice whether they have set up their custody well. Jens Gottheiner, advisor to Quirin-Bank, says: “If you can’t sleep well now, you should urgently adjust your portfolio and reduce the equity quota.”
Investors between the ages of 30 and 50 can afford a share quota of 50 to 70 percent, depending on the risk appetite. He or she should keep the rest in bonds and cash. Younger investors, on the other hand, can still save 100 percent with shares. After all, you have time to make up for any losses. In contrast, over 50-year-olds should reduce their equity quota to 30 to 50 percent in order to secure profits. Nevertheless, Gottheiner believes that they can also retire with 30 percent shares, which, with luck, will still yield earnings. “If someone has found an asset allocation that suits him, he should keep it,” says Olaf Stotz: “But he could sell poorly-made papers and buy well-done papers.”
What savers should do from Stotz’s point of view: think that Corona changes everything. “There will be changes, no question about it. But the basic trend is – if you believe in capitalism in the long term: companies will adapt to new conditions all by themselves. ”Therefore, Stotz thinks little of betting on trend companies. The risk of being wrong is great. He advises: Spread widely and invest globally. “Be sure to stick to your basic beliefs,” says Pimco fund manager Geraldine Sundstrom.