"According to stock market icon Dr. Jens Ehrhardt, immediate action is advised on stocks"
Loose Cannon Chat: Dr. Jens Ehrhardt, DJE Kapital AG's Fund Manager, Speaks Up on Current Market Troubles
"With production chains heavily dependent on Asia and exports to the US, companies such as Apple and sportswear giants are feeling the heat from those hefty tariffs—a whopping 90%—that could squash their profits and drag down stock prices," warns Dr. Jens Ehrhardt. Since the start of the year, he's been stashing more greenbacks in his funds and sticking to safe stocks, which tells you he ain't bullish about the current market times.
So what's a regular Joe or Jane investing in the market to do now?
Ehrhardt: "Buffett ain't so crazy after all"
For a hot minute, investment titan Warren Buffett met with plenty of ridicule, but look at him now—pretty smart, ain't he? Dr. Jens Ehrhardt agrees: "Buffet's currently got about a third of his portfolio in cold hard cash, and however you look at it, that's one helluva smart move. As for stocks, he's holding some Apple, but he's cut back on some, and the rest? Well, they're about as defensive as they get."
But here's the kicker: Ehrhardt's not done ringing alarm bells. He foresees a rise in US inflation, and if the iPhone and other tech gizmos get manufactured stateside, prices are gonna skyrocket. "Folks, the iPhone ain't gonna cost $1,000 anymore; it'll be $3,500 easy," says the good doc. "Should interest rates adjust to that inflation, well, that's peachy. But if those pricey imports dampen consumption and trigger a recession? Well, then, we're tenement city."
Stock market crash: Weighing interest rates
Ain't no two ways about it: We've got two forces in this world messing with interest rates:
- On the one hand, a dose of inflation could call for a rise in interest rates, but
- On the other, the potential risk of recession—particularly Stateside—could make rates plummet.
"I reckon the second will dominate," says Ehrhardt, "What we're gonna see is rates declining rather than soaring due to inflation." This rate drop might offer a short-burst boost to interest-dependent sectors like the construction industry, but the fact of the matter remains: global stock exchanges still feel the heat from Trump's trade policy.
Want more from Dr. Ehrhardt on this stuck-in-a-loop market crash and his plans on when he's gonna get back in? Check out the full "Smartes-Geld" video with fund manager Jens Ehrhardt.
And if it interests you, read up on this MSCI World ETF that's about to give investors a whole lotta heartaches. But don't lose hope. There's still a silver lining.
- Dr. Jens Ehrhardt, DJE Kapital AG's Fund Manager, suggests a wise move for investors might be to follow Warren Buffett's lead, as Buffett currently has a third of his portfolio in cash, with a focus on defensive stocks like Apple.
- Ehrhardt predicts a potential rise in US inflation, which could lead to steep price increases for products like the iPhone, potentially causing a recession if consumption is dampened.
- Ehrhardt believes that the potential risk of recession in the US will dominate, leading to a decline in interest rates rather than an increase.
- A decline in interest rates may initially boost interest-dependent sectors like construction, but global stock exchanges are still feeling the heat from Trump's trade policy.
- The MSCI World ETF may present challenges for investors, but Ehrhardt's full interview on the "Smartes-Geld" video offers insights on the current market troubles and his plans for re-entering the market.
