Andrea Papst’s* workshop smells of old wood and oil varnish, her work area is surrounded by fine paintbrushes and pigments. Ms. Papst, 47, makes and restores violins, a job that calls for musicality as well as manual skill. The job profile doesn’t include in-depth knowledge of global financial markets. But Ms. Papst is also a stock-market strategist.
As a freelancer, she knows she will be dependent on her savings to fund her retirement. So she needs a decent return.
Just before Christmas, Ms. Papst sold all her shares and funds. Having weighed up all the opportunities and risks, she calculated that the DAX index – the register of Germany’s 30 leading stocks – had tripled in value since the start of its rapid boom in March 2009. The situation on Wall Street in the United States has been similar.
After eight years, this is one of the longest-lasting bull markets ever seen, and shares have become very expensive. It seems increasingly likely to skeptics like Ms. Papst that more investors will be selling than buying in the future, which means that prices will tend to fall.
Whatever happens with stocks, these skeptics could benefit from a compromise: Buy shares now and multiply their original capital through dividends, unaffected by fluctuations in share prices. In the long term, they may even grow rich.