Rotation Revisited: Why European And German Equities Still Lead

Leon Laake
967 Followers
(17min)

Summary

  • In late 2024, I advised rotating out of the S&P 500 into European and German small-cap stocks due to high US valuations and economic risks.
  • Recent market developments have validated my advice, with European and German stocks outperforming expectations, though securing some profits now could be wise.
  • Despite recent gains, I still favor Europe and Germany over US stocks, but recommend taking profits and waiting for a setback in German stocks before investing.
  • For the US, I advise being very selective, with Defensives being worth a look.

EU- und US-Krise

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Introduction

In late December 2024, I published an article titled “It’s Time to Rotate Out of the S&P 500,” in which I emphasized the unfavorable return potential and higher downside risk due to high valuations and economic

This article was written by

967 Followers
I am a 25-year-old securities specialist working in private banking in Germany, with a longstanding interest in investing. My ability to analyze stocks has been honed through extensive research and the pursuit of several degrees, the titles of which do not translate well into English.My investment strategy primarily revolves around generating income from dividends or options trading. Additionally, I allocate a smaller portion of my portfolio to investing in small, highly disruptive companies to enhance overall performance. Outside of my banking and investment endeavors, I own a businesses which is an online shop catering to videographers, photographers, and production studios by providing essential equipment.

Analyst’s Disclosure:I/we have a beneficial short position in the shares of EWG either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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