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Landauf, landab fallen diesen Sommer die Jahrmärkte – in der Schweiz gemeinhin als «Chilbi» bezeichnet – aus. Anlegerinnen und Anleger können sich indes nicht über einen Mangel an Achterbahnfahrten beklagen, im Gegenteil. Die fürchterliche Sturzfahrt der Börsennotierungen des ersten Quartals ist an nahezu allen Märkten nahtlos in einen Anstieg übergegangen, der manchen im zweiten Quartal fast den Schnauf abgeschnitten hat.

Irrespective of the many flashpoints, equity and bond prices continued to rise throughout the third quarter. Gold in particular benefitted from this constellation. At the same time, the economy is slowing down, first and foremost because of the numerous ongoing disputes in politics.

What a quarter! The second three-month period bestowed gains on all asset classes. Even bonds in developed economies, which hardly anyone would have accredited with room on the upside in view of the low yields over an extended period now, managed to shine with positive results again. Adding in those achieved in the first quarter, quite handsome returns were achieved by mid-year, leading the Swiss business journal “Finanz und Wirtschaft” (Finance and Economy) to enthuse about the “best investment half-year in decades”.

The first quarter saw a broadly based recovery. All asset classes contributed to an all-round positive investment return. True, the global economy is cooling down, but for the time being, a recession does not seem to be around the corner. Financial markets are oscillating between hope and fear.

The financial markets suffered a crash in instalments during the fourth quarter, turning 2018 into one of the worst investment years since the financial crisis ten years ago. Hardly any asset class managed to deliver a positive return contribution. This was in spite of the economic environment not being so dire. Are economists blind or are exchanges exaggerating on the downside?

On the surface of it, the summer months passed rather quietly. The major exchanges were trending sideways, like most of the European ones for example, or more or less upwards, such as Switzerland, Japan and the USA. A rumbling could be heard from emerging countries like Turkey and Argentina, as well as from gold that shone only faintly.

Economically sunny, politically overcast, is a good summary of financial markets during the second quarter. In places, equities managed to recover some ground from the dive in the first quarter, whereas bond prices partially continued their slide. Gold found few friends, alternative investments attracted little attention.

2017 geht als guter Börsen-Jahrgang in die Geschichte ein. Aktien hatten daran einen grossen Anteil.

2017 will enter the history books as a good year for financial investors. Equities played a major part in this, but gold and hedge funds also managed to turn in a pleasing performance. It was by courtesy of bonds that the party was not spoiled. The economic outlook is good, supporting financial markets. Investors, however, are worried about high valuations.

The second quarter provided investors with further profits, with Swiss and European equities cutting a particularly fine figure. We undertook some major regroupings to our Swiss and Asian equity positions and we launched a new investment product.

The fourth quarter also kept the world in suspense and with that, the year closed true to course. In contrast to the Brexit decision, Donald Trump’s election as the next US president only briefly provoked discontent on financial markets. Within a day after the surprising result, equity markets had recovered from the setback again, and in the meantime, American stocks have even reached new highs. The US Dollar continued to strengthen, the Euro weakened marginally against the Swiss Franc and the Greenback. The European common currency only suffered minor injuries from Italy’s constitutional vote. As expected, the US Federal Reserve (Fed) increased the benchmark Fed Funds Rate (rate for overnight lending to banks) by ¼ of a percentage point to 0.5%.

One thing we have to give the Britons credit for, they are always good for a Big Bang. The first dates back to 1986 when Margret Thatcher’s government deregulated the London financial markets. The majority of market participants perceived this positively as in the years following, the Bang helped to increase the importance of the financial centre on the Thames and to narrow the gap between itself and its major rival on the Hudson River. As a result, prosperity increased throughout the country. However, after Big Bang 2.0, triggered by the unexpected result of the Brexit vote, the sentiment today along the banks of the Thames is very different. Long faces are the order of the day or, borrowing a famous English saying: „The financial community is not amused“. The mood was not lightened any further by the rating agency Standard & Poor’s decision to downgrade Britain’s “AAA” rating to “AA” with a “negative outlook”.

With the change of season, a cold front has also hit the exchanges. Contrary to Reinhard Mey’s song from 1972, the “autumn storms above the rooftops” in this case isn’t about love, rather the frustration of investors at the rekindling volatility and losses on financial markets. The third quarter lived up to its historically notorious reputation once again. Hardly any asset class managed to escape falling prices.

“La hausse amène la hausse”. The old stock exchange adage has not lost any of its validity. True, equities have been rising for quite some time now, but more recently it appears that they have risen mostly because they were rising. The bull-market is feeding upon itself. There are plenty of reasons for and against the equity markets’ current healthy shape. Optimists point to the liquidity glut provided by central banks, the low interest rates that make alternatives to equities appear unattractive, and the recovery of the economy, a light spring breeze that most recently has even reached the Eurozone. The pessimists invoke the high fundamental valuation of equities, the numerous geopolitical uncertainties, as well as the still unresolved indebtedness of many countries, as their counterarguments.

A year back, we quoted Mark Twain’s “It is difficult to make predictions, especially about the future.” Today we may confidently reiterate this, nothing has changed in this respect, nor will it in the future.

The second quarter caused a few worry lines, putting the wind-up on financial markets without much success. Particularly at the political level, there is a lot of rumbling to be heard. In the Ukraine, the annexation of the Crimean peninsula threw up high waves that have not quite subsided yet. In Eastern Ukraine, the bloody power struggle between pro-Russian and pro-Western forces continues, keeping financial markets under latent strain. With the Syrian conflict having expanded into the southerly neighbour Iraq, and the aggressively and expansively-acting Isis, a worrying component has been added, further fanning the flames of the Middle Eastern wildfires. With the declaration of a new caliphate whose head, according to the current definition, has claim on the leadership of all Moslems, developments took on a new, dangerous dimension.