Can anyone explain this comment ? "Germans have only 6% of their wealth in equities"

I was going to suggest property but Germans have low property ownership so I wonder.
6% sounds low but Ireland has only about 12% if I am up to date.
 
According to Mercer, German pension funds had an average allocation of 14% to equities in 2014.

Outside of pension funds, Germans retain the vast bulk of their savings in bank deposits - they are notoriously sceptical of equity investments.

As Brendan suggests, German banks are typically so flush with cash that they invariably have to lend money to risky borrowers to make a reasonable return.
 
might explain the remarkably low valuation of the DAX relative to other less financially secure nations

Irelands main equity index is far more expensive than the german DAX right now
 
"Germans have only 6% of their wealth in equities and only 41% of analyst recommendations across all stocks in STOXX 600 are rated BUY"

What are they actually invested in if this 6% is accurate?

http://seekingalpha.com/article/3358085-the-weekender?ifp=0&app=1

I can't comment on the actual figure, but in general Germans tended to favour fixed income instruments over equities in the past and it should be remembered that they had some great options there in the past. I can remember up to a few years ago having a Deutsche Bahn (not bank!) corporate bond with a yield of 12.5% in my pension fund, until it was finally redeemed! How they go forward remains to be seen, but like most Europeans they regard property as a very high risk investment and tend to avoid it. In fact I'm just back from the Schwarzwald and I was amazed to see 2 and 3 roomed apartments going for 50K - 60K, even in the tourist areas.

As for Seeking Alpha, I don't have much time for those guys simply because a lot of what they write is crap! For instance most of the referenced stocks are OTC, now in most cases these are micro caps, with possible a few small caps included - the bottom line is that these things should not be in most investors portfolio to start with! As for the pension funds etc... they refer to, who cares? Their strategy is always going to be different to the average investor in any case. And I doubt very much that any of the funds referenced will have very much interest in any of the OTC stocks referenced, for the simple reason that even if they bought the entire float and it doubled in no time, it would have little impact on their return.
 
Irelands main equity index is far more expensive than the german DAX right now

There is no basis for such a statement for reason already pointed out before else where. The constituents are very different and you're just comparing apples and oranges. End of story.
 
And the answer to the question posed is ??????

No property/small % equities.........It can't be all cash on deposit at ~ negative rates, how will the private person fund their pension?
 
There is no basis for such a statement for reason already pointed out before else where. The constituents are very different and you're just comparing apples and oranges. End of story.

must you always deliver your posts with such a haughty tone ? , its noticeable across different sites
 
And the answer to the question posed is ??????

No property/small % equities.........It can't be all cash on deposit at ~ negative rates, how will the private person fund their pension?
The source should have the details. From what I seen, these studies often use mutual funds and private pensions as separate categories even though they do contain plenty of shares.
 
And the answer to the question posed is ??????

No property/small % equities.........It can't be all cash on deposit at ~ negative rates, how will the private person fund their pension?

It is very difficult to know what the original figure relates to... But that said the private pension fund market is small in German because the first two pillars account for most of the pension financing. Most people will seek to max out their investment in the second pillar as it usually represent the best investment opportunity, so if this is excluded then direct equity investing then the number could indeed be that low I suppose. Also remember that the usual target in countries that operate the 3 pillar systems is that the first two pillars should deliver the major portion (60% -70% of pension).
 
Seeking Alpha is not the best source as articles are written by the likes of you and I. Yes, property ownership in Germany is low so investments would be in stocks and bonds, perhaps through funds and persions.
 
Back
Top