# German election to drive market down?



## onekeano (19 Sep 2005)

Just wondering if the stalemate on Germany will have a significant  impact of the stock market given that the market there had been up 15% which had "priced in the reforms that were on the way".

Any views?

Roy


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## joe sod (19 Sep 2005)

It will probably go down somewhat as the market had anticipated a christian democrat victory. However I think that Germany is still on track for recovery its industry seems to be thriving even in the current environment. However the german worker and german consumer will probably not feel as healthy as german industry. I think anyone investing in germany now is on a winner.


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## onekeano (20 Sep 2005)

Had been convinced of that myself until the election result but think there could be real problems in the short to medium term now. So have decided to move my Quinn Life Euro Freeway SSIA into bond to lock in the excellent profit for the last 8 months or so of the scheme.

Who knows in a year or so they might have sorted out the political mess and then it might be worth pumping the SSIA money into German property - but not till then.

Roy


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## dam099 (20 Sep 2005)

onekeano said:
			
		

> Had been convinced of that myself until the election result but think there could be real problems in the short to medium term now. So have decided to move my Quinn Life Euro Freeway SSIA into bond to lock in the excellent profit for the last 8 months or so of the scheme.
> Roy


 
Bear in mind that bonds are not totally risk free either. If interest rates rise bond prices will fall, by how much depends mostly on the amount of the rate rise and the time to maturity of the bond (so bonds maturing in the near future will not fall much or at all). It is not clear to me what Quinn lifes strategy is with regard to the term of its bond holdings in this fund.


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## onekeano (21 Sep 2005)

dam099 said:
			
		

> so bonds maturing in the near future will not fall much or at all).




Because of the relative short term (8 months) that why I decided to play safe, for want of a better expression.

Thanks
Roy


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## dam099 (21 Sep 2005)

onekeano said:
			
		

> Because of the relative short term (8 months) that why I decided to play safe, for want of a better expression.
> 
> Thanks
> Roy


 
Your time frame may be short, but that does not mean that Quinn are not holding long dated bonds. 

However I would say that if as most commentators seem to think the ECB do not raise rates over the next 6-9 months then it should not be a significant factor. Also one or two 1/4 point rate increase would not make huge differences its when interest rates rise by a few percent that you could see significant drops in bond prices.


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## onekeano (21 Sep 2005)

dam099 said:
			
		

> Your time frame may be short, but that does not mean that Quinn are not holding long dated bonds.



Hmmm.... just wondering if I should be asking Quinn Life if these are long dated bonds?

Also wondering if there are any other suggestions on how to lock in profits?

Roy


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