MSCI World analysis: USA better than world, IT sectors surprise - financial expert provides insights

MSCI World analysis: USA better than world, IT sectors surprise - financial expert provides insights

According to a report from www.test.de, the MSCI World Index, calculated in US dollars, has fallen by around ten percent in the last three months. This decline caused concern and criticism among many investors. Many argue that the high US share and the numerous IT companies are to blame for the weakness of the index. However, a review shows that US stocks and the IT sector have performed better than other countries and sectors in the index over all periods examined.

According to the analysis, the MSCI World Index in US dollars performed better than its euro counterpart over the year. However, the index has now fallen more sharply than the euro version. Nevertheless, local investors were able to partially offset the losses through currency gains. The analysis also shows that US stocks individually have performed better than the global stock market as a whole.

The criticism of the high proportion of the IT industry in the index is also refuted, as the IT industry was the best industry in the index over all periods examined. Without the IT sector, the MSCI World would have performed significantly worse. Additionally, growth and quality stocks performed exceptionally well during the periods examined.

The MSCI World is currently trading in euros around 1.8 percent below its all-time high, which represents a small weakness for German investors, but is nothing worrying. Investors in the US suffered a greater loss than investors in the euro area. Nevertheless, the MSCI World Investment is almost at an all-time high again.

The conclusion from the analysis is that when the market is weak, no investor should try to avoid phases of weakness and get back in before new price increases. A portfolio must fit an investor's risk profile and investment horizon and then you should leave it that way - in good times and bad. Interest investments are not a substitute for stocks, as stock markets have returned over 7 percent per year on average over the long term. Investors should therefore aim for a balanced investment that includes both stocks and interest investments.