Mr. Naumer, should savers just stash their money under their pillows?
That's definitely not the right thing to do. But hoping for high interest rates in the short term could, in the long term, leave you poor as a church mouse when you retire. It is however true that low interest rates mean your savings hardly grow at all, and inflation cancels out any gains immediately. There are only two things savers can do: either increase their savings contribution in order to balance out low yields, or invest more in riskier asset classes which may also deliver higher yields.
And these include stocks, above all?
Yes, stocks definitely form part of these asset classes. German savers are still very reluctant when it comes to stocks, although equity investments have been successful, looking back. The American S&P index (Standard & Poor's), for example, grew from 1871 to 2013 by 1,843 index points. That corresponds to an average year-on-year increase of 4.3 percent. If dividends are reinvested, this jumps to 8.7 percent, year-on-year. The foundation for this development is economic prosperity, which has continually increased in industrialized countries over the past 200 years. However, stocks also come hand-in-hand with risks. A mixture of stocks and interest-bearing bonds remains a tried-and-tested method to secure returns.
What proportion of your portfolio should be made up of stocks?
In general: the proportion of stocks is your life expectancy minus your current age. The concept: assets are made up of available capital left over from salary and other sources of income. If I know I'm going to continue to earn a good salary, I can make riskier investments. As I get older, I need to be a bit more careful with my investments, replacing riskier categories for more stable ones. But even when I reach retirement I don't have to completely eradicate higher-risk forms of investment.