pfp note: “It's all about liquidity, you fool.”

Roger Peeters sees the money available on the international securities markets as the main cause of the widespread price increases. “For some time now, the rising tide has been lifting almost all boats.”

September 16, 2025. FRANKFURT (pfp Advisory): It is September, meteorological autumn has begun, and the increasingly wet and gray weather is affecting many people's moods, as are the continuously shorter days and longer, darker nights. I have always wondered whether this correlation is causally related to the typically weaker stock market phases in September and October (the question is valid, especially since over 95 percent of global market capitalization is located in the northern hemisphere).

Nevertheless, the temporal overlap is a fact, and it is important to dress warmer in the morning on the way to work or school, and in a figurative sense, this also applies to financial investments: prepare for the usual autumn storms.

Does this necessarily mean that the markets will once again slide significantly, simply because the calendar dictates it? No, of course not. No one should presume to predict the markets, and of course there are also years when autumn is mild. Incidentally, this does not necessarily go hand in hand with a good year. I remember well how, for example, the third quarter of 2018 ended rather mildly, with many already looking forward to the year-end rally, and then October and especially December turned out to be completely disastrous (which in turn laid a good foundation for an excellent 2019). The stock market means dealing with fluctuations, and the best way to do this is to stay calm and focus on the long-term horizon.

This is not to say that investors cannot and should not consider the current situation. Of course, there are many factors that could cause the markets to slide at any time. In addition to potential “black swans” such as an escalation between China and Taiwan, it is also important not to forget to consider the “height of the fall.” In the trend-setting US stock markets in particular, many valuation parameters have famously returned to the dizzying levels seen in 2000 or even at the end of the 1920s. As was the case a quarter of a century ago, the party that has been going on for a very long time is accompanied by the certainly not incorrect assessment that a technical innovation will significantly change the economy and society. Back then, it was the widespread triumph of the internet; today, it is the much-discussed artificial intelligence.

Whether this justifies the valuations of individual tech giants, which sometimes reach double-digit revenue multiples, or whether the (trend-setting) US market is practically doomed to collapse due to its valuation level is a discussion I do not wish to engage in here. Especially since I believe that another influencing factor is currently even more relevant: the massive liquidity that has apparently been flowing into the markets for some time now.

I deliberately write “the markets” because the most indisputable indication is the parallel boom in various asset classes. Not only are stocks enjoying brisk demand, but residential real estate and private equity are also doing well. There is now a veritable buying frenzy for the tried-and-tested investment gold and its potential modern equivalents in the form of cryptocurrencies. For some time now, the tide has been lifting almost all boats. Left behind are commercial real estate, where there has been a structural break in demand, and bonds.

The latter is not surprising, as bonds are probably the vehicle closest to the monetary system. Whether the rise in stock or gold prices is the correct interpretation, or the opposite view that the fiat monetary system is losing trust and value on a massive scale, is something I cannot say, of course. However, I would venture to say that the development of the markets as a whole, not only in the fall but for a longer period of time, will not be determined by technical innovation or the economic cycle, but rather by the further development of liquidity, which is finding its way into various asset classes and also into the stock market. To paraphrase former US President Bill Clinton: “It's the liquidity, stupid.”