Following the news of US President Donald Trump’s imposition of tariffs on most of the world, markets experienced significant declines, with trillions being wiped off the stock market. Billionaires such as Elon Musk, Jeff Bezos, and Mark Zuckerberg saw billions wiped off their market value. Investors who had put money into ETFs or the stock market for their pension were left seeing red. To address these concerns, Euronews spoke with investment experts Christian Nolting and Robert Greil for their advice.
Both Nolting and Greil recommend trying to hold on to stocks and shares rather than impulsively selling off, as the worst days in the stock market can be followed by the best. They also emphasize the importance of hedging and strategic asset allocation in supporting future portfolio gains. Greil suggests staying invested but checking for excessive risks in individual sectors. This caution is particularly relevant for sectors affected by tariffs, given the current market volatility.
Some investors are considering investing more now that markets have decreased, a strategy known as buying the dip. However, this approach comes with risks, as the market remains uncertain due to ongoing shifts in US policy. Nolting suggests that there is still a case for buying the dips, especially for long-term investors in secular growth themes. Greil, on the other hand, advises caution, recommending that people wait until the situation stabilizes before making investment decisions.
While Deutsche Bank does not currently see a crisis in the stock market, Nolting emphasizes the importance of keeping cash in a bank account for flexibility. He also recommends investments in gold, the Swiss franc, and Japanese Yen for the longer term, as well as rebalancing equities exposure to more defensive sectors. Greil echoes these sentiments, highlighting the necessity of diversifying investments beyond just holding cash, including safer options like government bonds to minimize risks.
Although the risk of a recession has increased due to higher tariffs and market uncertainty, both Nolting and Greil are not panicking yet. Nolting believes that if sustainable trade deals are made, a US recession can be avoided, although Germany may still face challenges due to its high export dependence. Greil adds that Merck Finck does not currently consider a global recession to be their base scenario, as the removal of tariffs could prevent significant economic damage. Ultimately, investment decisions should be based on an individual’s risk profile and investment horizon.
