Felix Zulauf, a Swiss investor with a famous status, argues for stock picking, physical gold in Japan and expects a fundamental change in the stock market.
Because of the zero-interest rate policy of many central banks the investment opportunities would shrink, says investor Felix Zulauf. “The bond market as an asset class with the largest market capitalization falls so as an asset class”, he says. “Today we have fewer markets and thus fewer opportunities to make money.” That makes the investment much more difficult than before”.
Still, Zulauf’s motto is clearly: “stocks and gold belong in every portfolio.”
Ensure proper balance
Shares because the company would adjust to constantly changing conditions in the world much better than fixed investments such as bonds. And gold, because it would be a good insurance against extreme systemic risk.
Both asset classes would also provide a hedge against inflation. “When investing in equities you of course still operate stock picking and ensure that companies have a good business model and decent balance sheets and pay dividends,” said the Swiss.
On shaky legs
Despite the fact that many investors now expect a continued positive sentiment in financial markets, supply awaits “another crisis in the near future.”
“This year, investors and analysts are incredibly optimistic – that makes me wary. The majority assumes that the world economy has recovered significantly, because of higher growth. In my opinion, this expectation has weak legs. As of Q2, there will be disappointments,” predicted Zulauf.
Financing by printing
Ambivalently, the stock market guru is also respectful to Japan. The land of the rising sun goes in a new, but very dangerous era. Nevertheless, he puts on stocks from the empire.
“There we have about 20 years a deflationary environment. In the future, the Japanese government’s enormous budget deficit must be financed by printing, “says Felix.
A huge shift
After 20 years there will be a deflation in the coming years so the inflation in Japan – will be originating from the devaluation of its currency.”
He emphasizes that the real estate markets are national and sometimes even regionally very different.
“Spain, for example, fell sharply, while France is drifting. There I see very large risks. The German real estate market is in terms of average prices at the beginning of an upward trend, “said inlet.
Switzerland in a special situation
In Switzerland there is a special situation – the prices in recent years have drastically increased. And the Swiss central bank has now intervened by the banks demand higher reserves for mortgage loans.
“In my opinion,” he concluded, “inlet draw should be included in a large real estate portfolio but only in areas where their legal future is certain.”