FRANKFURT (dpa-AFX) - Once again, there are fewer shareholders in Germany: the number has fallen for the second year in a row, but remains above the twelve million mark. According to a survey by the German Share Institute (Deutsches Aktieninstitut, DAI), a good 12.1 million people in this country had shares, equity funds and/or exchange-traded index funds (ETFs) in their securities accounts on an annual average in 2024.

A year earlier, there were more than 12.3 million; in 2022, a record high of almost 12.9 million shareholders had been reached. Is the stock market euphoria already over?

Aktieninstitut: "Positive long-term trend continues"

The German Share Institute in Frankfurt views as a success the fact that the number of investors has remained above the twelve million mark for five consecutive years: This shows that "the understanding of the importance of stocks, equity funds and ETFs for retirement planning and wealth accumulation in Germany has increased," says Aktieninstitut CEO Henriette Peucker.

Surveys confirm this: in a YouGov survey for HDI Versicherungen in the summer, one in four of the 3,748 working people aged 15 and over stated that they had the greatest confidence in exchange-traded securities such as shares, funds or bonds when it came to providing for old age. The only thing more in demand is home ownership.

Many investors have become even more cautious

But the trend is not clear-cut: Germans are considered risk-averse – and according to a Kantar survey commissioned by the Association of German Banks (BdB), the need for security has actually increased. Only just under one in five (19 percent) of the 1,003 adults surveyed in December were open to the idea of taking on more investment risk in the future in order to potentially make more out of their money. In the survey a year earlier, the figure was still 33 percent.

In the long term, a broadly diversified stock investment generates an average of six to nine percent return per year, the Aktieninstitut advertises – and once again calls on politicians to make stocks more attractive as a form of retirement planning. "A look at countries like Sweden, Canada or the United States shows that a modern pension system should be based on a savings plan in stocks," the institute writes.

Is the equity-based pension coming?

For years, there have been discussions in Germany about how to strengthen the equity culture. However, the launch of a so-called generation capital, which was intended to strengthen the statutory pension with equity returns, fell victim to the failure of the coalition negotiations – now hopes are resting on a new federal government.

There is definitely room for improvement: According to the calculations of the Aktieninstitut, in 2024, around one in six (17.2 percent) of the German population aged 14 and over held shares. According to Aktieninstitut, the reasons for the decline in the number of shareholders include investment restraint due to the uncertain economic situation and higher savings interest rates, which have made other investments more attractive again.

Savings interest rates have fallen again

In fact, instant access savings and fixed-term deposits have become more lucrative again since the European Central Bank ended its policy of zero and negative interest rates in the summer of 2022. However, conditions have already deteriorated again because the ECB has again significantly lowered key interest rates, which banks use as a benchmark.

So while many Germans are saving like there's no tomorrow, in many cases their money is losing value when inflation is taken into account. Thomas Schaufler, member of the board of Commerzbank responsible for private customers, believes that savers in this country could make more of their money with a little more know-how: "We in Germany are still a long way from an investment culture like that in the USA."

Traditionally, German savers leave huge sums of money in their checking accounts without earning interest or park the money in instant access savings accounts. According to a projection by DZ Bank, a good third (36.8 percent) of the 9.3 trillion euros in financial assets that private households in this country accumulated in 2024 will be cash and deposits such as overnight money: 3,435 billion euros. Equities account for 880 billion euros, or 9.4 percent, of the total.

The development among younger people gives hope to the German Equities Institute: bucking the trend, the number of equity investors in the under-40 age group rose again by 150,000 to 3.7 million in 2024 after a decline a year earlier./ben/DP/mis