Industrial Group: Now also in the model portfolio

As Mahatma Gandhi once said, "Be yourself the change you wish to see in this world!" The problem: The vast majority is preoccupied with itself, not capable and ready for effective change... except for technological progress. Possibly, however, we are indeed, with or without war in Ukraine, already in a turning point, a paradigm shift or a painful caesura. Or perhaps the current trouble spots are just causing us to think more deeply and the world will soon be spinning again at its usual rhythm... until climate change shows us the limits? It remains "undecided"!

Fact is that politics dominates the regional and global economic cycle more and more in many places and thus unfortunately serious undesirable developments arise. Europe in particular is maneuvering itself more and more onto the loser's street and the Americans are doing what they always do... steering everything according to their ideas. We should be careful to make our eurocentric view the yardstick for all phenomena/developments on earth! Even if a value-oriented behavior is praiseworthy, this "hypocrisy" is not necessarily enough for a value-oriented success. Russia and also China know to evade sanctions shrewdly. It remains "inconclusive" here, too!

It is also a fact that we are now definitely in a bear market, after the S&P, for example, went downhill by more than 20% in the first half of the year; the worst development since 1970. After the "inflation shock" from the end of 2021, the "interest rate shock" caused further skid marks in 2022. Will there still be a "recession crash" in the second half of the year, or has a great deal of negativity already been priced in? Much will depend on the voluntary or forced behavior of consumers. We think that the correction is not quite over yet and that the summer months, probably into late fall, will remain difficult and very volatile. We may have "nibbled" a bit too early with our "dusting off" limits, but recommend adding more "morsels" of quality stocks to the portfolio in case of further setbacks. And should a (last) "wash-out" actually follow in the near future, which we do not completely rule out due to a good possible earnings compression (declining corporate earnings in 2Q22 and 3Q22), you should then probably definitely grab in the form of the "main course"! Caution remains for the time being, however, the "mother of the china box"! The past is no indicator for the future development; if it were - related to the S&P 500 - the bear market would end in October 2022 at around 3,000 points. We can well imagine that the bulls will take the reins again by the end of the year at the latest; Bank of America considers a rise to 6,000 points possible for the S&P 500 by 2028, in the next bull market. If this does not give a spark of hope in the longer term... but it remains "inconclusive"!

With our performance of "only" -7.4% (as of 28.6.) we are very well in the race!