It is now 10 years ago since the collapse of Fortis and Dexia, but this financial trauma is still lingering in people’s collective subconscious. Belgian families are taking fewer risks than before the crash. What impact does the crisis still have? What will the future bring?
Research conducted by asset manager Legg Mason put the spotlight on the investment behaviour in Europe since the crisis. This showed that Belgians keep approximately 37% of their assets in cash, in both current accounts and savings accounts. This was 27% before the crisis. These figures have shown us that the Belgian investor is one of the most timid. Italy and Spain are the only places where investors are even more nervous, probably as a result of the demonstrations which had a greater impact on the population. Belgians who do decide to invest mainly do so in fixed income securities and property, with as little risk as possible.
The problem with the current attitude is mainly that the average Belgian investor expects a higher return from that savings account than reality can offer. They are about 2% off their estimate.
We are not all simply returning to the stock exchange en masse. It is mainly the investors who used to have a dynamic profile who have returned. But even the most aggressive profiles are now more cautious. The growing presence of the millennials in the investment market appears to have particularly caused a turning point. With few memories and no losses suffered as a result of 2008 crisis, they are finding the making of smart investments a great deal easier. Plus they are more inclined to take a risk, which means they, with an average return of 5.5%, earn approximately 1.5% more than the previous generation of investors.
Belgian investors are optimistic about the future. Around 22% of those currently active within the market intend to take more risks from 2018 onwards and will be adding investments to their portfolio.
The defensive investor will opt for safe shares, safe property and safe raw materials as diversification in 2018. The dynamic investor will resolutely opt for shares in 2018, even though this will still be with the necessary level of caution. Investments in raw materials will do particularly well during the forthcoming years. They effectively link into both the millennials, who are just starting to invest, as well as the baby boomers who remember the crisis well, as a result of their relative crisis resilience. The diamond particularly offers a safe haven for all profiles where investing in raw materials is concerned. Cost effective, crisis-proof and intrinsically valuable? That is the future.
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