17 March 2023

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Bear markets: an eye on fundamentals

Luigi Campopiano

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Experience and knowledge become indispensable factors that can help you move with greater awareness in a context that remains challenging and complex for equity markets, including risks of recession and new geopolitical tensions on the horizon.

Listen to the expert’s advice, as they have a deep understanding of financial dynamics and the latest news.

In the U.S., investors and the public are following the recent collapses of Silicon Valley Bank and Signature Bank with unease. According to USA Today, President Joe Biden plans to ask Congress and federal regulators to tighten banking rules to make it less likely that a major failure happens again.

Here are 3 tips to overcome the most difficult moments as an investor:

1. Change in a changing world. Recognize first that things will change and what used to work for stock selection will no longer work the same way. In the future, and we have already seen it, it will likely be more difficult to generate positive returns, and the factors that determine them are likely to change.
2. Put the fundamentals under the magnifying glass. Don't rest on addictive storytelling and not getting caught up in irrational exuberance but focusing on the healthy company fundamentals.
3. Separate the wheat from the chaff. Fundamental analysis becomes essential for identifying the most solid and promising leads. Have the courage to maneuver through whatever happens. Keep only the most convincing investments and eliminate suitors. Separate, in fact, the wheat from the chaff.