Opinion

It is striking how few investors dare to bet their cards on the Magnificent Seven before 2024. All sorts of things are being tipped, but the Magnificent Seven have to suffer.

The hype is over and they could fall apart at any moment. It is either no good or it is no good. For an investor who dares to think contrair, it is an interesting premise.  Here are the top 10 misconceptions surrounding the Magnificent Seven.

Outsourcing, kickback fees, alternative investments, ESG challenges and competition with Ireland were among the topics of the most popular columns published on Investment Officer Luxembourg in 2023.

A major hazard for investors is becoming too entrenched in their beliefs, especially when evidence suggests a different narrative. While the idea of a “soft landing” may seem overly optimistic, it’s undeniable that some bastions of investment remain resilient, as evidenced by sustained corporate profits.

Mismatch

The investment fund business is continuously trying to keep up with updates, guidelines and new rules. Another major impact will soon hit the fund business. On 6 November 2023, the Council of the European Union published the final text of the amendments to the Alternative Investment Fund Managers Directive (AIFMD).

Germany is witnessing an economic downturn, a phenomenon receiving surprisingly scant attention. This mirrors a broader European trend of overlooking the foundations of prosperity in favor of more sensational topics.

Germany’s robust industrial sector, about 20 percent of its GDP, is the linchpin of its economic success.

The chemistry and energy-intensive industries are vital here, consuming 77 percent of the industrial energy and contributing significantly to the GDP.

In a recent speech, Christine Lagarde highlighted the dire implications of prolonged high inflation, linking it to the very fabric of democracy. This sentiment, echoed in my book “Turning Point 1971,” underlines the non-economic ramifications of inflation, often overshadowed by its economic impacts.

These days, it is almost impossible not to talk about gold or bitcoin - for me, these two assets are close in what they offer investors. So I do just that. What strikes me most is the extreme divergence that has emerged in a traditionally very strong relationship.

On the 4th of September 1996, Luxembourg signed its most recent tax treaty with the United States of America. According to that agreement, Lux-based ETFs pay a 30% withholding tax on income received from US securities, as opposed to the 15% paid by their Irish counterparts.

Skyrocketing mortgage rates and astronomical house prices make it almost impossible for the average American to buy a house. So activity declines. The result is a drag on growth.

The US 30-year mortgage rate, while falling slightly, is still close to its highest level in more than 23 years. Nevertheless, house prices have risen to record highs after a brief dip. This is only nice if you own a house, because otherwise it is an unfavourable combination economically.

On September 23rd, residents of the Gare district protested against the escalating levels of insecurity in their neighbourhood. While residents bear the brunt, asset managers, their clients, and employees are also affected by the increasing anti-social behaviour in the area.