in recent weeks we have experienced a period of considerable turbulence in financial markets:
all major stock indices have recorded significant declines and current prices treat below the moving average long-term (200 seats)
volatility on stock index has instead soaring to levels not recorded in the last year
yields on German government and American declined by about 50 bps (0.5%), thus increasing the spread than corporate bonds and emerging markets bonds have started to outperform the shares
on the currency front the dollar has strengthened against the euro not only but also of the currencies linked to commodity cycle
always on raw materials are seeing a decline in energy commodities and industrial metals, while gold is sent to new highs
in essence we have experienced in recent weeks, the so-called phenomenon of 'flght to quality' that is, the sale (often messy) to move to trim risky securities risk-free ( EIB supranational bonds, U.S. and German government bonds, gold).
are personally convinced that the crisis of the peripheral countries of the euro has little to do and even less has to do mostly speculation.
or better, because speculation has to do with financial instruments to leverage (selling?) Amplifies the movement of the market by taking advantage of particular areas of structural weakness (the euro in particular, at this time) in a general context, however, negative.
the real reason for the recent downturn of the market lies in the slowing world economy (and especially American) scheduled for the second half of this year: the Weekly Leading Index has been declining for several months and can be estimated that the U.S. GDP will grow, but at a slower rate than desired making it difficult to sustain the growth of corporate earnings.
in short the stock market is currently overvalued, based on different estimation methods based on profits, on average by 20-25%.
WHY 'THE CURRENT MARKET' POTENTIALLY DANGEROUS?
an overvalued market breaking important technical support can have extremely negative implications because the 'technical investors' will be inclined to sell while the 'fundamentalist investors' will not be available to purchase at least until the fall in prices will be insufficient to induce these last to absorb the supply of shares on the market.
and 'important in these moments, not totally eliminate the risk from portfolios (as n is practically impossible to determine the extent of the fall and the moment in which we started) accept as a risk exposure that does not exceed the limit that you are willing to tolerate,
is that the appropriate time to evaluate rigorously, if your portfolio is appropriate and consistent with their financial profiles and objectives and, where appropriate, provide the appropriate adjustments.
