Summer Storm. Fierce and Fast.

“Summertime is vacation time!” That's how my last Gutmann Viewpoint newsletter began before the August break. It would have been better if someone had told the financial markets that. They didn't want to know anything about feet in the Mediterranean Sea, sipping a bottle of (non-alcoholic) beer.

The strong price fluctuations on the stock markets in August were probably fueled by the lower occupancy on the trading screens. Many Wall Street traders and fund managers on the beach looked in disbelief at the share prices flashing deep red on their iPhones. 

Gutmann has reacted to the events. With active calm. Because hasty transactions in panic-stricken markets lead to poor results. And we want to avoid that at all costs. Preparation, on the other hand, is essential. 

Can you still remember the atmosphere two years ago? 

Published forecasts predicted a recession in the USA with a 100% probability. However, the slowdown never came. So much for 100%. 

Just over a month ago, hardly anyone expected a hard landing for the economy. But then the mood gradually deteriorated. At the same time, it became known that US investor Warren Buffett had halved his large holding of Apple shares in the second quarter and that his company, Berkshire Hathaway, was now holding a record amount of cash. Does he foresee a price decline, market participants wondered. 

At the same time, the yen rose against the US dollar and the euro. For the first time in a long time. Speculation in the popular financing currency came to an abrupt end. This cocktail was enough to send share prices plummeting. However, the panic was brief and the recovery quick. 

Anyone who was on vacation in August and allowed themselves a digital time-out noticed little change in their own portfolio at the end of the month. Once again, it's better not to look at the price ticker too often. 

We cannot protect our clients from the fluctuations of the financial markets. Even if we are well prepared, short-term setbacks are unavoidable. On the other hand, we want to ward off permanent capital loss at all costs. The best shields for this are the discipline of our investment strategy and the quality of the securities we select.