In an international comparison, German investors often do poorly: But why do so few Germans like stocks?

The ups and downs of the share prices: price table of the Dax in Frankfurt

IIn an international comparison, German investors often do poorly: But why do so few Germans like stocks? This is due to a combination of risk aversion and overestimated risk, which mainly arises from a lack of information. This is what scientists from the Frankfurt School and Goethe University found in an analysis commissioned by Deutsche Börse, which is based on a representative Internet survey.

In 2018, the share quota in this country was only 16 percent – compared to America with up to 54 percent, only a small share, according to the stock exchange. This is mainly due to the fact that Germans rate their financial knowledge as insufficient and are extremely risk-averse.

For an investment in exchange-traded index funds (ETF), as recommended by numerous scientists, such knowledge is only necessary to a limited extent, it is said: “Many do not know that there is a lot that you do not need to know,” says Michael Grote, co-author of the Study and professor for corporate finance at the Frankfurt School.

Great fear of loss

The study also shows that fear of an economic catastrophe and fundamental fear of loss are widespread obstacles. Personal experiences and emotions also played a major role. Just under a quarter of those who do not own any shares associate a good feeling with the idea of ​​being a shareholder themselves.

Among the stockholders, this is 61 percent. The latter also increasingly associated positive terms with shareholding – profit and opportunity, pride or joy. The thoughts of the non-owners, on the other hand, were much more about losses and risks.