Certainly not a reverse role model – columns

December 07, 2020

from Lars Brandau, managing director of the DDV

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After the difficult year is before the difficult year. Investors who believe that the markets will only go up after the pandemic run the risk of paying dearly for careless investment decisions.

The stock market year 2020 is likely to be remembered by many investors for a variety of reasons. There were investors who had saved up at the time of the crash in the spring, then invested heavily when prices were low and now look back to the end of the year in a somewhat reconciled way, because after the rapid recovery period they mostly remained without major losses. And then there are certainly also some traders for whom the volatile year should have been an Eldorado of active trading.

What would now be the opposite of exemplary behavior in the context of the depot clearing is how to proceed with the otherwise popular scrap gnomes: Investors who want to sit out their losses simply transfer individual positions under water to their children’s depots; True to the motto: They have time and at some point things will work again. Investors should learn to part with products from time to time, to sell them, even if they have to claim losses as a result.

Because the stock exchanges have developed a life of their own that is difficult to calculate. This makes it more difficult for investors and traders to generate positive returns. While basically all players in the capital market who concentrate on traditional products have to accept losses, it is precisely those self-decision makers who enjoy profits who actively hedge their portfolios with the help of leverage products.

Again and again, I can vehemently contradict the prejudice that leverage products are only for daredevil speculators. Over the past 30 years, the market has undoubtedly become increasingly “mature”. In this respect, there is some evidence that the importance of leverage products among private investors will not change in the future either. In relation to the ups and downs in the coming year, these hedging strategies are likely to gain in importance.

The DDV is the industry representative of the leading issuers of derivative securities in Germany. As a political interest group, the DDV – the largest of its kind in the world – is also active in Brussels. The members are among the most important issuers in Germany. They represent 90% of the total market. The DDV promotes the derivatives market and thus the acceptance of certificates, reverse convertibles and warrants. The aims of the DDV also include protecting investors and improving the understandability and transparency of the products. Further information at:

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