NO RISK, NO RETURN

In other words risk less means return less. Many of investors, traders are scared to pull the trigger. They scared to enter into the market, because they lost at least once before in his trading career. Most of the traders are remembering well for 2007/2008 Credit Crunch’s massive losses. So most of us still fear to buy stocks. This kind of investors missed out the last five years opportunities and the rally.

Blackrock released a survey which shows clearly most of investors are afraid, remembering well the 2007 crisis. This survey says 48% of assets still held in cash, 18% in stocks and 7% in bonds.

The typical investor recently is ultra conservative, still not buying stocks. “The dramatic stock market decline from October 2007 to March 2009 appears to still linger in investors’ minds,” says Sarah Holden. The SP500 since January gained around 24% which is brutal, but in longer term in a decade the SP500 only did 5% per year. Which is ironically not enough for a normal investor. That is funny. They want to make more than 10% per year.

What I recommend to investors now. Pull the trigger because the bull market started 4 years ago, that is true. But if the bulls are really strong they can exist much further than 4 years. After the post war period they gained for more than 20 years.

Now we are at Schiller PE ratio 24,4. At the Internet Bubble 1999 this ratio was over 40. We are still far from the bubble sentiment. The median is around 16, and we are above that level but not extremely.

Take a look at our Swiss fund and begin to invest with us!

The BFM Assets Team.