care to elaborate a bit more?
tldr;
Bottom of the dip? Not in Germany, it looks like all-time high:
They can fool themselves as much as they want. In CHF terms, which is much closer to the inflation adjusted numbers than the number in EUR, current DAX level is 8.1% below the ATH in August 2021. (TradingView).
4 Likes
With the rapid decline of inflation experienced, (having more than halved from about 12% to below 6%, and it looks more pronounced if you zoom out a little) I doubt there was a shortage of people to whom the path seemed very clear at the end of 1976.
Got some dry powder ready - hoping for a short flash crash 
1 Like
This is not even a drop in the ocean.
Volume of NYSE and NASDAQ was about 53â000 B$ in 2022, so more than 200 B$ a trading day (just counted 52 weekends, no other bank holidays).
And for sure the sale will hapen in several tranches spread out over several weeks.
2 Likes
Let me try to do my favorite exercise: convert between different units.
The article in German language talks about â150 Milliardenâ, which 150*1E9 = 1.5E11 $.
Your data in English show a turnover of 200*1E9 = 2E11 $ per day. Which is the same order of magnitude as the number from the article.
Am I right? Not such a drop in the ocean after all.
1 Like
Well I was referring only to the 11 B$ of the SNB since it was such a catchy title 
Sorry about that.
But I am still pretty sure that these funds have some rebalancing plan and do not drop the whole package at once.
(BTW : I am not sure if the author is mixing world wide stocks and US stocks only)
There were some ups and downs after
But nothing interesting until very recently we had got a new high after the 30.09.2022 bottom:
13.6.2023: 1727.88 CHF, -11.3% from ATH, +13.5% from the 30.09.2022 bottom, 9.9% YTD.
Yesterdayâs value is already 2% lower. I expect the markets to pull back next 2-3 weeks and end up 5-6% below the last high (lower limit of the Bollinger bands of VT in CHF, TradingView).
It did. Major indices in USD are making new 1 year highs, but not in CHF terms.
ist der Dollar am Vortag in Reaktion auf die US-Inflationsdaten deutlich unter die Marke von 0,8750 Franken abgerutscht. Sollte es nicht rasch zu einer Erholung ĂŒber diese Marke kommen, sei mittelfristig mit Tests der beiden letzten Tiefpunkte von 0,74 Franken (Aufgabe der Mindestkursgrenze 2015) und 0,70 Franken (US-Schuldenstreit 2011) zu rechnen. Die UBS sieht die US-Devise Ende Jahr bei 0,85 Franken und im Juni 2024 bei 0,83 Franken. Bis zum Jahr 2030 könnte der US-Dollar laut den Auguren der Grossbank gar auf 60 bis 70 Rappen sinken.
However 
I was thinking a bit about the devaluation of other currencies with respect to CHF. We see that long term all currencies are losing value in CHF terms. But, and this is a big but! I think these charts are misleading because they donât take into account compounded interest earned by cash deposited at short term market rates, money market type. The effective market hypothesis would imply that no matter which currency you are depositing at short term market rates, long term you are coming to the same result, otherwise there is an arbitrage opportunity. Say, in 10 years USD is falling from 1.00 CHF to 0.9 CHF, which we see as a devaluation. But in the same period, 100 chf are growing to 105 CHF, and 100 USD are growing to 166.67 USD, which results in the same amount in CHF.
Now, if we take into account the fact that our net income after taxes is reduced by taxes on nominal yield, the stack of currency with a lower yield and lower depreciation is going to worth more than the stack of currency with higher nominal yield and higher depreciation. That leads me to two conclusions:
-
According to the effective market hypothesis, by investing in currencies with higher nominal yield we, Swiss investors, are expected to lose in comparison with staying in CHF. And this is even before considering FX fluctuations risk.
-
The negative CHF rates period, where a zero interest account would earn rates well above the risk-free rate, should have significantly boosted the value of our CHF deposits vs. any other currency that was giving positive rates.
P.S. had anyone looked at JPY bonds already 
?
8 Likes
Itâs inevitable. Higher inflation, higher interest rates, USD will keep losing value against CHF longterm.
Bummer⊠VTâs on a bull run, but in CHF terms youâve lost out
2 Likes
You mean, USD is in the free fall, and thatâs the point
6 Likes
Itâs just listed in USD. You are actually invested in all major currencies of the world.
7 Likes
Ainât that even worse ?
Say you have VT, which in 10 years goes from 100$ to 200$, when usd goes from 1 chf to 0.5 chf.
Are taxes going to be based on that 100$ profit or on that 0 chf profit ?
Doesnât matter much in Switzerland since there is no capital gains tax.
Furthermore dividends are made in the home currency of the country of the underlying stocks and the fund just give it to you in converted dollars.
Finally, if you would have a capital gain tax in a country, you would be taxed in terms of home currency.
(has to be checked in the destination country though).
1 Like
Even if there was one, it would (most certainly) only be levied on the increase of the respective CHF equivalent (none, in the example). Just like wealth tax is.
If anything, differences in the relative distribution yields should be looked at. 2% interest + 3% currency appreciation is preferable to 5% interest and no appreciation (for tax reasons).
1 Like
Well, that was bound to happen (credit rating agency Fitch downgrades the US long term rating to AA+ (from AAA):
https://www.fitchratings.com/research/sovereigns/fitch-downgrades-united-states-long-term-ratings-to-aa-from-aaa-outlook-stable-01-08-2023
Analysts seem to think it wonât change much, I tend to agree. Thereâs nothing new that wasnât known before but weâll still see how itâll play out. In any case, the moves in the forex and futures markets are rather small for now.
1 Like