{"id":2744,"date":"2025-01-16T18:36:27","date_gmt":"2025-01-16T17:36:27","guid":{"rendered":"https:\/\/investmentphilosoph.com\/?p=2744"},"modified":"2025-08-24T13:29:51","modified_gmt":"2025-08-24T11:29:51","slug":"maerkte-2025-you-cant-predict-you-can-prepare","status":"publish","type":"post","link":"https:\/\/investmentphilosoph.com\/en\/maerkte-2025-you-cant-predict-you-can-prepare\/","title":{"rendered":"Markets 2025: \u201cYou can't predict, but you can prepare\u201d"},"content":{"rendered":"
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\u201cTo buy when others are despondently selling and to sell when others are euphorically buying takes the greatest courage but provides the greatest profit.\u201d<\/strong><\/p>\nSir John Templeton<\/cite><\/blockquote>\n\n\n\n

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Market timing does not work, that is well known and scientifically proven. Annual forecasts also fall into this category. Fortunately, this realization is now quite widespread and at least some investment houses have completely dispensed with year-end price predictions. However, a well-founded assessment of the financial markets that highlights opportunities and risks remains an essential tool for investors. Under the motto \u201cYou can't predict. You can prepare.\u201d, we take a look at the current situation and analyze how investors can position themselves.\n\nTranslated with DeepL.com (free version)<\/p>\n\n\n\n

US stock market under the microscope<\/h2>\n\n\n\n

The US stock market dominates the global markets. The S&P 500 rose by almost 25 % last year, having already gained 26 % in 2023. Since the 2007\/08 financial crisis, the Nasdaq 100 (+894 %) and S&P 500 (+302 %) have clearly outperformed international indices such as the DAX (+161 %, note including dividends), MSCI Emerging Markets (+31 %) and the Euro Stoxx 50 (+14 %).<\/p>\n\n\n\n

Chart 1: USA dominate<\/h5>\n\n\n\n
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Source: Chart created with Koyfin.ch.<\/figcaption><\/figure>\n\n\n\n

This performance has massively increased the US share of the MSCI World to over 73 % - a historic high. <\/p>\n\n\n\n

Chart 2 & 3: USA determines the (MSCI) world<\/h5>\n\n\n\n
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Source: MSCI.com.<\/figcaption><\/figure>\n\n\n\n
\"\"\n\t\t\t\n\t\t\t\t\n\t\t\t<\/svg>\n\t\t<\/button>
Source: John Authers, 07.01.2025.<\/figcaption><\/figure>\n\n\n\n

It is also worth noting that the ten largest companies in the S&P 500 now account for 39% of the index. This concentration surpasses both the \u201cNifty Fifty\u201d era of the 1960s and the dotcom bubble of the late 1990s.<\/p>\n\n\n\n

Chart 4: Top 10 more dominant than ever<\/h5>\n\n\n\n
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Source: Ned Davis Research.<\/figcaption><\/figure>\n\n\n\n

And because high yields are attractive and are often extrapolated into the future, investors are predominantly invested in the USA - according to BoFa, this is the highest level since 2001.<\/p>\n\n\n\n

Chart 5: USA highly weighted by investors<\/h5>\n\n\n\n
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Source: Bank of America Fund Manager Survey.<\/figcaption><\/figure>\n\n\n\n

One of the main reasons for the popularity of the US market is the innovative strength of American companies, particularly the \u201cMagnificent 7\u201d (Apple, Nvidia, Alphabet, Meta, Amazon, Tesla and Microsoft). But not only have profits risen, valuations have also increased significantly. The price\/earnings ratio (P\/E ratio) of the S&P 500 is currently around 22. <\/p>\n\n\n\n

J.P. Morgan Asset Management examined the monthly P\/E ratios from 1988 to 2014 (almost 324 in total) and compared them with the annualized returns over the following ten years. The findings are:<\/p>\n\n\n\n