Stock interest is on the rise.
In a recent survey conducted by the German Institute for Asset Building and Retirement Security (DIVA), it has been revealed that stocks are gaining popularity as a hedge against impending inflation among both consumers and financial experts in Germany.
The investment index, developed by DIVA, has shown a significant rise from 41.1 to 46.7 index points since the previous survey six months ago. This increase suggests that Germans' reservations about stocks are decreasing, indicating an increasing interest in stocks. Among financial experts surveyed by DIVA, 94% consider stocks as the best protection against inflation.
However, among 2,000 consumers, the investment that protects best against inflation is not specified. Among 800 financial advisors, the investment that protects best against inflation was not specified in the survey results.
Stocks are in third place among consumer investments against inflation, with 24% of respondents considering them as such. Real estate is considered the safest investment against inflation by 37%, followed by precious metals at 26%.
The "stock-based investments" that DIVA counts include individual stocks, funds, and high-equity funds-based insurance policies. Among 18- to 29-year-olds, support for stock investments has decreased slightly since the previous measurement.
Experts suggest that a balanced portfolio combining short-duration bonds, inflation-linked real assets and commodities, and high-quality dividend-paying stocks offers the best protection against inflationary pressures. Quality bonds, including short-duration German government bonds (Bunds), are viewed as good hedges against equity volatility and inflation risk.
Real assets and commodities are suggested as direct inflation hedges due to their physical nature and ability to preserve value amid rising prices. Dividend stocks of financially strong German companies with stable or growing dividends are also favored, such as Deutsche Börse AG, Talanx AG, utility firms like E.ON SE and RWE AG, and real estate investment trusts (REITs) like Defama.
It is important to note that the survey did not specify the investment that protects best against inflation among 800 financial advisors. Whether the renewed interest in stocks among Germans will persist remains uncertain.
The BDV, which is associated with the financial distributor DVAG, operates DIVA. The survey results were based on responses from 2,000 consumers and 800 members of the BDV. The index is currently at a high level, according to DIVA. DIVA surveys consumers and professional financial advisors twice a year to determine the index level.
[1] Source: DIVA survey results (2022) [2] Source: Mattioli Woods market commentary (2022) [3] Source: UBS Germany analysis (2022) [4] Source: Market commentary from various financial experts (2022)
In light of the DIVA survey results, 24% of consumers view stocks as a potential investment to protect against inflation. Expert opinions within the same survey highlight stocks as the best protection against inflation for 94% of financial experts.
