The performance of the markets and the economy in the last quarter can be interpreted in three ways. He supports it Alessandro Fugnoli, Kairos' strategist, in the latest episode of his monthly column "Al Quarto Piano".
The first interpretation “is that of a temporary bounce (bear market rally), especially for the Stock Exchanges – explains the analyst – A bit like what happened in 1930 after the 1929 crisis: there were several months of recovery, but then the situation deteriorated seriously again. In this case we would have to sell everything and wait for the market to turn back to buy back”.
The second possible reading is that this is "a continuation of the cycle started in the last decade – continues Fugnoli – and that therefore on the Stock Exchange there continues to be a clear prevalence of growth stocks over stocks linked to value”.
Finally, the events of the last few months can be understood as "starting a new cycle – underlines the Kairos strategist again – The previous one, which lasted more than 10 years, would have ended in February; after which a recession began, which will continue to weigh on this year and next, associated with a violent fall in the markets in March. Now, however, a recovery phase is beginning which could last for many years”.
If the last hypothesis were the correct one, Fugnoli believes that they should be purchased "cyclical rather than growth stocks, because each cycle is led by a group of stocks that is different from those of the previous cycle”.
But which of the three scenarios is the most likely? According to Fugnoli, reality should place itself halfway between the second and third interpretation: “At a structural level we are faced with a continuation of the previous cycle, because the economy has maintained the basic characteristics it had, but we are also in the presence of a new cycle. This means that both growth and cyclical stocks (which by the way have fallen a lot) should be kept in the portfolio until at least 2022, i.e. until all the expansive measures will presumably be maintained at the monetary level e fiscal".
