Midtown Blogger/Manhattan Valley Follies: Die Welt- State of the Euro and Opportunities for Investors

So effusive the big investment banks were much longer. The international financial institutions on offer currently with praise for European and especially for German stocks. The price targets for Dax & Co. are screwed up in rows. The background is an apparent paradox: the weaker the euro, the better for the exchange operating company. And currency weakness is seen as increasingly fundamental.

For local consumers such price decline is associated with a loss of purchasing power on the world market. All the products are imported from non-euro-area, for example, raw materials such as oil and iron ore, become more expensive in local currency.

However, investors can intelligently against the decline of the euro secure: put on stock market values that benefit from the Euro-melt. For export-oriented businesses is a weak local currency is a blessing. The profits abroad put on a euro basis namely the extent to how to win dollars, pounds or other currencies to the euro.

The US investment bank Goldman Sachs has released a new low predicts that, by 2017, the price of the single currency after the strategists view to 0.80 dollar crash. This is not only the most pessimistic forecast euro on the market, but would also be a historic low for Europe's currency.

To achieve this target, the euro would have another 23 percent lose value. But not only Goldman, also Credit Suisse, Bank of America and the German Bank have cut back this week their price targets for the single currency strong.

Depression of the euro so far at $ 0.82

In October 2000, the euro was trading at $ 0.82 in the short term. That was the previous low. In 2008, the European money had worked up to 1.60 dollars. If true, the Goldman forecast, the euro would record in two years only half as high as before the outbreak of the debt crisis.

The weak euro is a major reason that the big investment houses are becoming more optimistic for European equities. Goldman Sachs trust the shares now to six percent more potential. The Citigroup has recently ratcheted up their expectations by as much as 12.5 percent. Credit Suisse says even quite frankly: "Now you have to have German stocks." They are the biggest beneficiaries of a weak euro.

The depreciation of the euro is accompanied by ever-declining bond yields. This makes equities more attractive because they are in a competitive relationship with bonds. Some of the interest on bonds with high credit ratings are even negative, that is, investors pay a little extra. "The negative bond yields in Europe should give a further boost stocks," said Peter Oppenheimer, an investment strategist at Goldman Sachs.

Also, asset managers are full of praise for the Dax. "The current Dax Party is primarily due to the weak euro," says Burkhard Wagner, Director at Partners Asset Management. In addition, there is of course the very robust consumer by the low price of oil.

The DAX companies generate 40 percent of its sales outside the euro zone, which accounts for about half of the United States. MDax there are still a third of its revenue incurred outside the euro area. In addition to the values of the SDax there are significantly less. In these smaller companies is the domestic market of greater importance.

Share prices of exporters attract

The benefit draw the exporters from the weak euro, is reflected clearly in the stock market down. Has the Dax gained over the year proud 28 percent, it is the DAXPLUS Export Strategy for the same period 43 percent.

In DAXPLUS Export Strategy those ten companies are represented from Dax and MDax that generate the majority of their business abroad, including for example the engine specialist MTU Aero, where the North America (USA and Canada) represents two-thirds of sales, and Fresenius Medical Care, which derive more than 60 percent of the business in the dollar area.

Within Europe, Germany benefits as strong export nation most. Of the substantially improved export opportunities in the US"This is especially true for internationally known companies such as Bayer, BASF, Linde and Siemens , "says Wagner.

But companies in the second row can be happy. "That's about the fashion brand Hugo Boss or the chemicals group Lanxess, by the weak euro benefits, "says Benjamin Betz, asset managers of the Bavarian AG assets in Traunstein. Even at the current valuation levels it is worthwhile to put on such export values: The currency effects are not yet included in the fundamental ratios and most forecasts.

Index Certificate for investors

"It is generally dangerous to buy stocks only due to currency developments," warns the other hand, Thomas Wüst, Managing Director of Valorvest asset management in Stuttgart. Much more important than monetary developments are other factors, such as the business model, the market position and what products and services a company can sell sustainably with an interesting margin on the market.

"Since most companies to hedge against currency risks in the short term to foreign exchange market developments are already in the medium term," says Wüst. And to predict medium-term currency trends, is - also due to geopolitical dependencies - nearly impossible.

"All companies that are on the world market with North American and Swiss companies competition is likely to benefit disproportionately from the euro weakness," says Uwe Eilers, CEO at Geneon asset management in Königstein.He calls the values of Airbus, Siemens, Bayer, BASF and the car manufacturers BMW , Daimler and VW as beneficiaries. He also believes that earnings estimates underestimate the extent of the changes in the foreign exchange market yet.

Who does not want to be limited to individual title that should take index funds on European industries, recommends Betz. In return, offer his opinion on ETF industry sectors, which traditionally have a high export revenue, "This is for example the automotive, consumer and industrial sectors." Also on the DAXPLUS Export Strategy there is a product, namely an index certificate (WKN: HV095B).

"Market participants praise only slowly that the euro's weakness is not just a temporary phenomenon, but a paradigm shift," says Goldman strategist Oppenheimer. For intelligent investor thus still have enough time to protect themselves with export values against the common currency, the euro.