2018 was one of the worst years since 2008 for stocks, according to Jacques Lemoisson, head of global macro and alternative investments at Compagnie Bancaire Helvétique (CBH). However, the banker believes that it is still too early for investors to ‘buy the dips’.
He said: ‘Central banks are in the process of standardisation, geopolitical tensions are still very present and the fixed income markets always send alarming signals.
‘The US yield curve tends to zero, and a total inversion is not far off. That generally announces a recession.’
For Lemoisson, another indicator proving that it is still too early to take advantage of cheap stock prices is margin debt, which has steadily increased over the past 10 years. However, this figure experienced a decline at the end of 2018.
‘If the markets go back but margin debt does not increase, you should be very conservative in your investments,’ he said.
‘For the moment, “buy the dip" seems a bit too optimistic.’