Almost 10% growth in global financial assets last year and 29% growth since 2007, the last
year before the crisis hit - the main results of this year’s “Allianz Global Wealth Report” paint
a very positive picture at first glance: the crisis would - finally! - appear to have been confined
to the history books. Nevertheless, there are a few unpleasant truths lurking behind
the figures, reminding us that we have no reason to sit back in satisfaction, let alone to
become complacent.
First: the strong growth witnessed in 2013 is largely due to the exceptional performance
of the stock markets in Japan, the US and Europe. Last year saw many investors clock up
substantial valuation gains in their portfolios. But this is just a snapshot, not cause for complacency.
The turbulence that has rocked the last few months serves as yet another painful
reminder that stock market performance is not a one-way street.
Second: in many developed countries, savings are still at rock bottom. Nowhere is this more
glaringly obvious than in western Europe: compared with 2007, the volume of financial assets
accumulated has almost been sliced in two; leaving Germany, Europe’s “savings champion”,
aside, it falls even further to less than 40% of the pre-crisis level. The situation in the
majority of emerging markets looks quite different: here, rapid asset accumulation is being
fueled largely by rising incomes and an increase in the volume of funds set aside as savings
among the new middle class.
Third: for many savers, especially in Europe, bank deposits are still the investment of choice,
whereas long-term investments, including equities, are still being avoided like the plague.
Money is being “parked” as opposed to invested. This is clearly at odds with the new reality.
After all, the crisis we have been grappling with over the past few years only serves to
reinforce the need for individuals to take responsibility for their own retirement provision:
with government coffers bare, the ticking of the demographic time bomb is getting louder
and louder.
Fourth: it was not only assets that experienced brisker growth last year; debt growth started
to pick up speed again as well. This applies, in particular, to a number of Asian countries,
where the rapid increase in private household debt is already setting alarm bells ringing.
So strong asset growth alone does not necessarily point towards sustainable development
on the whole. After reading this extensive analysis of the global asset and debt situation
of private households, which we have continued in this fifth issue of the “Allianz Global
Wealth Report”, we are therefore forced to reach a sobering conclusion: all in all, our current
(savings) behavior is still miles off the sort of behavior we need if we want to rise to the
challenges facing us both today and in the future. In this respect, there is not really much of
a difference between matters relating to wealth and matters relating to climate protection,
financial market regulation or dealing with “big data”. I hope that this report can provide
something of a boost in getting the ball rolling so that we can strengthen the overall framework
for the creation of sustainable prosperity
https://www.allianz.com/v_1411404269000/media/press/document/Allianz_Global_Wealth_Report_2014_en.pdf
