To The Moon

Is it worth investing in the German economy?

Germany’s largest stock exchange, the Frankfurt Stock Exchange (DAX), reached it’s high on June 16th, with 16,427.42 euros. It’s now at 15,790.34 euros. Germany recently entered a recession, with GDP growth at -0.3% in the first quarter of this year. But to make the most profit off of stocks, it’s best to buy when the market is low, and sell when the market is high.

What led to Germany’s downfall?

Germany is the biggest economy in Europe and one of the biggest worldwide. And a recession for the economy means that it will affect a big part of the world.

Price Shock

As energy prices increased due to the Russian-Ukraine war, German consumers had to handle with high prices for almost anything. Increased inflation means that there will be less people willing to buy products. This decreased consumer spending, one of the five parts that goes into GDP.

GDP is calculated by: consumer spending + government spending + investment + (exports-imports)

Overealiance on Russian gas

Before the war, Germany imported the most amount of Russian gas and right now, they still are one of the top buyers of Russian gas, showing their dependence on Russia. Due to this, they have to face price hikes, and they are not doing well. This shows how other countries need to diversify their imports to make sure they can stay stable, and that their citizens will stay safe.

Since Germany imported the most, they are facing severe things in their economy, and is now the first European country to have a recession since the war started.

DAX

The Frankfurt Stock Exchange uses DAX, a collection of 40 of Germany’s top performing and biggest companies. Due to the recession announced last month, it has seen decline to the point where investors are wary of investing in DAX.

1 month view of DAX. Started of with a recession and ending lower than the first price

Around the middle of Jun 2023 and Jul 2023, you can see a max peak. That is when the price was the highest, at 16,427.42 Euros, and after that, it starts to decline. However, a little after Jul 2023, it starts increasing again

A general graph of the DAX

Should you invest?

The German economy is one of the strongest in the world, and it being a safe country certainly helps. Recessions are a perfect oppurtunity to make money, and the German economy has potential to rebound back better. But then again, it’s only been around a month. The stock market may go down further. But whatever happens, Germany’s economy can go up. Whenever the time feels right, that’s when you should start investing. Again, hope this helps and hope you have a great day!

@TigerStars @CaptainTiger @MillionaireTiger