“Many Germans still think that stocks and shares are not a safe investment." Thorsten Michalik from Deutsche Asset Management advises a rethink on cash investments and explains how to make a profit in the long term.
In conversation with the expert
Germans have to say goodbye to old habits – four theses on investments in the modern age
Rethink capital Investments!
Four reasons why you should do so:
- The piggy bank is dead: at today’s interest rates saving is no longer worthwhile; Germans – world champions when it comes to saving – have to say farewell to traditions they hold dear.
- Stocks and shares can also be safe: the German Institute for Share Promotion (Deutsches Aktieninstitut), has established that if shares in DAX companies are held for 13 years on average, there is no loss. Yet many Germans still think that stocks and shares are not safe Investments.
- Stocks and shares can be profitable: German equity funds have delivered an average annual return of 4.8 per cent over a period of ten years, and European mixed funds 3.8 per cent over ten years.
- Interest-bearing securities no longer pay off: when the new millennium dawned you could double your money with a fixed-income investment after 15 years. 15 years later it would take 200 years to do so! If the doldrums continue, fixed-income securities will be of no use as a retirement provision.
What you should remember:
Do not put all your eggs in one basket. Diversification is the most important aspect when investing in shares. Ideally by means of an equity fund or mixed fund. The first step in this respect is a meeting with your investment advisor.