September 7th, 2011
Radio journalist Dr. Michael Brown pointed out to me with a request to comment on the facts that the German people a year to spend more money on cut flowers than for German stocks. This leads to some interesting follow-up questions. Among other things, consider whether it would be better because if German listed companies have more German shareholders.Specifically, the question is formulated not know if it would be better, but for whom it would be better.
Maybe one could argue about that residents show more loyalty towards domestic firms and thus make life easier for the directors of the company and possibly other employees of these companies easier. It remains unclear whether it also for those whose lack of willingness to invest in German stocks complains, would be better to invest more in German than in foreign stocks.
Low propensity to invest in German stocks could be an expression of the fact that German shareholders, the shareholders in so far smarter than most other countries, have decided to choose the possible risks as independent sources of their income. Because they have their jobs in Germany, it is reasonable for them to secure sources of income outside of Germany. If it should go with the German economy as a whole once bad, is reduced by a foreign investment is a bundle of risk.
Everyone knows that you should not put all your eggs in literally the same basket. Any reasonably informed contemporaries may also know that he can not permanently rely on federal benefits. The citizen is ultimately also that he must take himself for the age pension. No sane politician will advise him to the extent allowed other behaviors.
If the citizens for old age and for the case of other potential losses in income makes provision, he shall send his assets – largely independent of their absolute height – reasonably wish to distribute to various types of investments, by, for example, with a self-marketable securities to can put small charges on the entire index of another country to come, as appropriate, be easy to sell investment vehicle for anyone in question.
For those who live in a developed industrial nation like Germany and worked, for example, it will be very close, to buy ETF securities for the so-called BRIC economies of such countries. European, American and Japanese stock markets would also provide, where to invest in Europe around outside the euro area would have to independence from the euro area countries to ensure common currency risk.
The foregoing considerations do not require further explanation. Altogether it is clear that the reasonable investor should try to invest as widely as possible. Apart from domestic plants, for example in the Germans still preferred but not always future-proof housing sector is to remember to put money abroad. This is certainly the case if one is interested in a confining retirement risks.
The strategy described is not, however, behind the low tendency of German shareholders to invest in German stocks. They tend rather to over foreign securities even more suspicious than against the Germans. If they invest in equities at all, then even more in Germany. They seem to be of the opinion that the value of shares in faded about as fast as that of cut flowers in the vase. A slump of course you can never rule. All investments involve risk and the financial crisis and the dramatic decline in the value of shares in their course seem to have occupied again. So does the German investors encouraged, rather than in cut flowers to invest in stocks. And since he does the same the whole world in his gentle heart with one.