Germany’s equity culture recovers

Only 9% of German wealth is invested in shares and investment funds, according to the Bundesbank. "Germans like fixed interest rates, and are willing to sacrifice higher returns for that security," Kay Bommer, general manager at the German Investor Relations Verband, told Reuters.

Apart from being famously risk averse, many Germans burnt their fingers badly in the late 1990s. Close to two million people bought into the "heavily advertised but ultimately ill-fated flotation of state-owned Deutsche Telekom in 1996," Tobias Buck points out in the Financial Times. When the dotcom bubble burst, they suffered heavy losses. "This did a lot of damage to the reputation of the stockmarket," Martin Weber, a professor of economics at the University of Mannheim told the FT.

But now the lousy returns on savings accounts with interest rates at record lows have clearly started to irritate people and promote risk-taking. The number of shareholders in Germany rose to 10.3 million last year, a 12-year high, from a post-crisis low of 8.4 million.That's still very small compared to the US or Britain, but it's an encouraging development. The trouble is that history may be repeating itself. As in the 1990s, Germans may be once again turning to the stockmarket at the last stage of a prolonged bull run . So the "next crash could turn yet another generation off shares," says Buck.

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