It comes as no surprise that the pandemic has caused major financial damage to investors. ING experts have calculated how great the damage is. But there are also signs of hope.
How won, melted away – that is the subtitle of the ING study "Our money & Covid 19 ", which deals with the effects of the virus in the first quarter of 2020 in Germany and Europe. And indeed, the data relating to the first quarter of 2020 look partly devastating: The coronavirus led to a record loss for European savers.
Worse than the bursting of the dot-com bubble
Their financial assets decreased by a total of 771 billion euros or 3.0 percent compared to December 2019. That was by far the highest financial asset loss in the last 20 years, the experts have calculated. The second largest quarterly loss, the bursting of the dot-com bubble, would have been just 2.6 percent in the first quarter of 2001. According to the data, German savers got off relatively well, losing just 2.0 percent, or 128 billion.
But there is really no serious reason to worry about your money. Compared to the previous year, almost all countries are up, according to ING. With Greece, Italy, Belgium and Spain, only four out of 19 individual states in the euro zone would have made losses compared to the previous year. Greece was hit hardest overall.
Cash & Stocks popular in Germany
In the crisis, German savers rely on cash and shares, the ING experts have found out. More than every fifth new savings euro (22 percent) flowed into the till. Equities were also very popular, with equity investments increasing by 14 billion or 15 percent. The big loser in the first quarter, on the other hand, were bank deposits, which, at five percent, were as little new money as they have been for 15 years.
However, one would have to add "And won again" to the study sub-title, because the outlook looks good. With the recovery of the capital markets, the financial assets of German savers will increase by an estimated 3.4 percent or 212 billion euros to a new record of 6.55 trillion at the end of June 2020.
Within a quarter, this is the highest absolute increase in wealth of all time, as well as the third highest percentage increase in the last 20 years. So sometimes you just have to sit back and do nothing, the study could conclude. Unfortunately, you never really know when.