Boulevard of Broken Dreams – Dreamt right

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  • Value Insights

People have a tendency to exaggerate. This applies to investments in the capital markets just as it applies to many other areas of life. One example is the longstanding, exaggerated demand for growth stocks that the market saw in times of no interest rates and no inflation. That bubble has now burst as it was driven by unrealistic growth expectations by many market participants. This hope is typical for growth stocks. Secondarily, the new development of interest rates means that profits that lie far in the future are worth significantly less than profits in the next fiscal year.

The mistake lies in the fact that most growth investors assume significantly higher growth rates for their portfolios and are therefore prepared to pay considerably more for them in order not to miss out on potential trends...

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Goran Vasiljevic

Managing Director (CIO)

 

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