Out with Zollcrash, in with record highs: Should you invest now in the recovering DAX market?
Stock markets regaining momentum: have they turned a corner?
The DAX, Europe's mighty index, has risen above the ashes of the Zollcrash and set a new record high—leaving us wondering if it's time to dive in and ride the wave of recovery. At the Invest trade fair in Stuttgart, we sat down with the savvy minds of Friedhelm Tilgen, Matthias Hüppe from HSBC, and Michael Proffe from Proffe Invest to discuss this very question.
Fun Fact Did you know the DAX's recovery is no small feat? It's the first major European index to outdo its March 2025 highs! Through early May 2025, it leads all global indexes with a mind-blowing 15.29% year-to-date gain [2].
But here's the scoop: The DAX's excellent performance isn't just luck; it's driven by factors such as the finalized U.S.-U.K. trade agreement and Germany's new government, both of which have investors buzzing about broader trade agreements [5].
Now, let's talk investment: Investing in the DAX at this point might seem tempting, but there are a few key factors to consider. First, the DAX has previously pulled back from those record highs due to overbought conditions [3]. That could signal a correction or stabilization before further growth.
Also, keep an eye on global economic developments. For instance, U.S.-China negotiations and Federal Reserve decisions have significant impacts on market sentiment [3]. Then there's the performance of those key German companies—Siemens Energy and Commerzbank—that have kept the index afloat [5].
Two cents: If you're convinced that German corporations will continue kicking goals and global trade conditions will remain rosy, investing in the DAX now could be your ticket to a wild ride. But remember, you've gotta watch for those market corrections and keep up with global economic developments. Also, diversifying your portfolio and maintaining a long-term perspective is always smart.
Sources:
[1] Source: CNBC
[2] Source: Deutsche Bank Research
[3] Source: Reuters
[4] Source: S&P Dow Jones Indices
[5] Source: ntv.de
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always consult a financial advisor before making investment decisions.
- The community at the Invest trade fair in Stuttgart discussed the recovery of the DAX, which has surpassed its pre-Zollcrash highs, and the potential for investing in it now, with experts like Friedhelm Tilgen, Matthias Hüppe from HSBC, and Michael Proffe from Proffe Invest offering insights.
- The excellent performance of the DAX isn't solely due to luck, but rather factors such as the completion of the U.S.-U.K. trade agreement and the new German government, causing excitement among investors about broader trade agreements.
- While the DAX's record highs might seem tempting for investment, it's essential to consider potential market corrections due to overbought conditions, global economic developments, and the performance of companies such as Siemens Energy and Commerzbank.
- If an investor is confident in the continued success of German corporations and rosy global trade conditions, investing in the DAX could lead to a thrilling ride, but keeping track of market corrections, staying informed about global economic developments, diversifying the portfolio, and maintaining a long-term perspective are all advisable.
