The past year offered investors plenty of surprises. In the age of Donald Trump, sound economics seems to have trumped political uncertainty, as an ongoing boom in the world’s stock markets continued to exceed analysts’ expectations. Some individual stocks have posted astonishing results in 2017, including some that were on nobody’s radar at the beginning of the year. (Think Bitcoin.)
Germany was no different. In politics, the country has tumbled into uncharacteristic uncertainty. A government is still not in place, three months after an uncertain election result in September. And yet, 2017 was a good investment year. The DAX, Germany’s leading stock market index, increased in value by around 14 percent. The smaller associated indexes — the MDAX, SDAX and TecDAX — all returned even stronger growth.
Next year could have a similar story, buoyed by solid company earnings and a steadily growing economy. A poll of 32 banks by Handelsblatt found the average prediction is that the DAX will rise another 7.4 percent next year — passing the psychological mark of 14,000 for the first time in its history. (The DAX is currently sitting at just under 13,000.) If history is our guide, that would be pessimistic: Most analysts predicted the DAX would flatline this year.