The current stock market crash, triggered by the tariff policy of US President Donald Trump and accompanied by global economic uncertainties, has prompted many investors to reconsider their investment strategies. The question of whether now is a good time to enter the stock market depends on several factors, including investment horizon, risk tolerance, and portfolio diversification.
Current Market Situation
- Stock Market Crash: The DAX has suffered significant losses in a short time, with the index dropping by up to 10.4% and falling below the 20,000-point mark. This crash is part of a global reaction to the US tariff policy and fears of a recession.
- Global Markets: Other markets such as the Nikkei and the Hang Seng have also experienced massive losses, indicating global uncertainty.
Considerations for Entering
Investment Horizon
- Long-term Investors: For investors with a long-term investment horizon, the current crash could provide an opportunity to buy stocks at a lower price. Historically, markets have often recovered after such declines.
- Short-term Investors: For short-term oriented investors, it is riskier, as markets may continue to be volatile.
Diversification
- Broad Spread: A broad diversification of the portfolio can help minimize risks. Investors should invest in various asset classes to avoid being overly dependent on a single market.
ETFs as an Alternative
- Exchange Traded Funds (ETFs): ETFs offer a way to invest broadly in the stock market. They can be a sensible option to benefit from the long-term development of the market without concentrating on individual stocks.
Strategies for Entering
- Long-term Perspective: Investors should focus on a long-term perspective and not try to determine the optimal entry and exit points.
- Diversification: A broad diversification of the portfolio can help minimize risks.
- Regular Investments: Regular investments, regardless of the current market situation, can help reduce the average price and decrease volatility.
- Risk Management: Investors should review their risk tolerance and make adjustments if necessary to limit losses.
In conclusion, entering the stock market can be sensible if one thinks long-term and follows a well-diversified investment strategy. Panic reactions should be avoided, and investors should focus on their long-term goals.