DThis time the Dax was fast. He first reached 17,000 points five weeks ago, and now 18,000 followed at a gallop. At that time, the leading German index had only risen faster from 11,000 to 12,000 points. That was in 2015. But sometimes there are years between one thousand and the next.
The stock market moves in waves. There are many uncertainties. But one thing can be said with very high probability: the next thousand is definitely coming. The 18,000 points will also only be an interim step. It will always remain that way.
Why? Because people strive for comfort. He wants to eat well and enough, work as little as possible, at least not too physically strenuous. He wants to be well looked after when he is sick and old, he wants to be mobile, he wants to travel. These needs come in varying degrees and urgency, but more or less all eight billion people strive for them.
Previously field work, today care robots
What does this have to do with the DAX? All 40 companies are quite successful in meeting the needs of humanity. With cars from Mercedes, BMW, Porsche and VW, with medicines from Merck and Bayer, with cement from Heidelberg Materials, with good taste and smell from Symrise, with aircraft and aircraft parts from Airbus and MTU, with apartments from Vonovia, computer chips from Infineon, Trains from Siemens, power plant technology from Siemens Energy and so on.
The companies are innovative. Three hundred years ago, most people had to work very hard in the fields in order to feed themselves. Huge advances have made work easier, thanks to mechanical engineering, fertilizer and much more. Today there are vacuum robots for carpets at home and care robots for older people. Soon we will probably be able to call China and the artificial intelligence will translate simultaneously.
Life becomes easier and more comfortable. But there is still room for improvement, as everyone will confirm. Making work even easier, even better medicines against cancer and much more, clean energy production, healthier nutrition. The needs of the 8 billion people are far from being met. And as long as that is the case, there will be companies competing to best meet demand and create new demand.
The DAX companies regularly set new profit records. More than 50 billion euros of profits will be distributed to the owners, the shareholders, this year. For taking the risk to provide companies with capital to operate. This is not without risk. Companies also go under. But it is the minority. Especially among large corporations such as those included in the leading indices around the world. If you spread your money in such an index, i.e. invest in several companies, and are patient, your risk of loss drops to around 3 percent after ten years.
And for those who always hesitate and don't think record highs are a good time to start: Today is almost always a better day to buy stocks than tomorrow. This is the case in structurally rising markets. That was also the case at 17,000 points five weeks ago. And that's how it is now. Whether in the DAX or in the MSCI World is secondary. Most companies work globally and benefit from the need to catch up in many regions of the world.
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