A Swiss asset manager has warned of a possible pullback in the DAX, comparable to the price decline in April 2025. He highlights four important warning signals that investors should note to prepare for a potential correction.
Overvaluation of Stocks
Similar to other markets, a significant valuation gap relative to the fundamentals has been observed in certain DAX stocks. A fair value model identified overvaluations as early as December 2024, indicating a potential for price losses. This may also point to an overbought situation in the DAX.
Fundamental Weaknesses
Rising input costs, intense competition, and declining revenue growth can burden corporate margins. These factors are also significant for German companies.
Market Technical Signals
The DAX could exhibit technical warning signs, similar to April, such as increased volatility or breaking through important support levels. These are typical indicators of upcoming pullbacks.
Macroeconomic Uncertainties
Global economic challenges or political risks could exert additional pressure on the market.
This assessment is particularly important for private investors. They should critically review their portfolio composition to identify overvalued positions. Utilizing fair value analyses, considering fundamental corporate data, and technical market indicators can help avoid larger losses due to a potential pullback.
In summary: The DAX is facing a phase of heightened correction risks with four central warning signals – overvaluation, fundamental pressures, technical weakness, and macroeconomic uncertainties – which is relevant for private investors.