German investors apparently reacted more calmly during the historic market slump in spring than in previous crises. “We have a completely different situation compared to the financial crisis – German investors were very level-headed and acted in the long term,” says Hans Joachim Reinke, CEO of Union Investment, in the capital podcast “The Hour Zero”. “There were no drains, rather inflows.”
Union Investment, the investment company of the Volks- und Raiffeisenbanken, also felt this in the numbers: According to Reinke, the company has recorded almost 300,000 new savings contracts since the beginning of the year. “The interesting thing is that a lot of young savers were there – around 45 percent are under 35,” says Reinke. And also a lot of new savers: More than every second savings contract was concluded by people who had not previously saved in funds.
In past crises, German investors often reacted incorrectly: if they owned shares or funds, they panicked away from the papers – and often only got back in after the markets had recovered. Equity ownership and equity culture have been arduous for some time, despite years of low and zero interest rates. According to Union Investment data, it was apparently different this time. “People save and they have a long-term perspective,” says Reinke. The savings rate has also risen from 9.7 to 16.7 percent and is almost in an “erratic state”.
The violent slump in March also surprised Reinke, who has been on the financial markets since the end of 1980. The head of Union Investment expects the economy to recover in the second half of the year. However, growth is limited for the next two years as long as there is no vaccine yet. “I’m not that optimistic in the short term,” says Reinke. “Because the capital markets will remain fragile and we will be dealing with high fluctuations.” His advice to investors: “Hold on and maybe even buy in.” The low interest rate environment had “cemented and spread” – so it was important in To invest shares.
You can hear the complete interview in the new episode of “Zero Hour – Germany’s Way Out of the Crisis”.
In the new podcast “Zero Hour – Germany’s Way Out of the Crisis” Personal-Financial.com Editor-in-Chief Horst von Buttlar talks to people who experience the corona crisis and its economic consequences up close. All episodes can be found on Audio Now, Apple Podcasts, Deezer, Soundcloud and Spotify. You can use the RSS feed for all other podcast apps. Take the feed URL and simply add “Zero Hour” to your podcast subscriptions.