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No time to buy

Everybody tells you this is ‘no time to buy’. All the more so given that stock prices have risen so much in the past 12 months, it is popular to ‘wait for a correction’ before getting in. Our Head of Research, however, sees the situation a little differently.

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Key takeaways:

  • Those living in the ‘buy low, sell high’ camp had their last chance in 2009. For everybody else, it is ‘there is no perfect time to buy’. So stocks are all the more at all-time highs.
  • This is still about staying invested while tweaking portfolios. We continue to prefer US over eurozone stocks. 

The new James Bond movie will be released by the end of the month. It was pushed to a future date 18 months ago due to the pandemic. This was so un-007-like but understandable from a pure profit angle. The accountants had seemingly taken over her majesty’s secret service. Then again, after hearing the title of the new feature (‘No time to die’), it became clear that there was no way they could release it during the worst pandemic in a hundred years. The producers – unlucky from a neutral point of view – would have been called anything from cold-hearted to outright stupid. But finally the odds are good that Daniel Craig will soon make his last appearance as James Bond.

You may say I have a one-track mind, but the title resonates with me as a common rule to investing: everybody tells you this is ‘no time to buy’. All the more so given that stock prices have risen so much in the past 12 months, it is popular to ‘wait for a correction’ before getting in. In fact, the notorious ‘buy low, sell high’ crowd had their last entry point 12 years ago (I wonder how many dared at the time after the Great Financial Crisis). For everybody else, it is about acknowledging that life is not perfect – the 6, 7, 8, or any other day in September 2021 is not the ideal day for investing – and doing it all the same.

Thus, we maintain our mantra to be fully invested until central banks tell you otherwise. They usually do this by hiking rates – ‘risk-free assets at a higher rate, anyone?’ Just to be on the same page: futures markets are currently expecting the first rate hike for the US in 2023 and for Europe in 2025 (see ‘Number Of The Week’), and they both will do their utmost to keep expectations where they are. So there is plenty of time to buy.

Number Of The Week

How should you position your portfolio in the view of Julius Baer's experts?

> Contact us to find out

Markets Explained

What is going on in the markets? Julius Baer’s experts share their views.

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