Bad news rarely comes alone. The inflation! Price increases of ten percent lower the value of the savings. The stock exchange! Since the beginning of the year, prices have been in double digits. The real estate! After records, the markets are now collapsing.
The fact that interest rates are rising again is only half good news. Although there is now a mini return on the call money account, anyone who has bonds or pension funds from the low-interest period in their custody account has to accept price losses there too. Quite apart from the fact that higher interest rates are stalling the economy.
Millions of savers thought they did it right this time. They bought low-cost ETFs, exchange-traded funds that track an index. In the current situation, many investors are going through their first major stress test: have I actually invested sensibly? Can I deal with the course swings? And what decisions do I have to make for 2023?
One thing is certain: It has never been so easy and cheap to get involved in the financial markets. This is one of the results of the study that the star, together with the Institute for Wealth Creation (IVA), produced for the fourth time. For this purpose, it was examined which possibilities banks and comparable institutes offer for regular investments (see box on page 64). There are savings plans for mutual funds, for exchange-traded funds (ETFs) and for digital asset managers (so-called robo-advisors). The experts compared costs, service offerings and options. The best offers were awarded four and five stars. "Savings plans are becoming cheaper and are also increasingly being offered at lower savings rates," says Christian Apelt from the IVA. It usually starts with 25 euros per month.
Nevertheless, interest in the securities is declining, observes Michael Herte, financial expert at the consumer center in Schleswig-Holstein. In consultations, it is no longer a reflex: "Money has to go to the stock exchange, in shares or funds." Suddenly there was another topic that had almost been forgotten: interest rates. "1.5 percent for one year - that's tempting," he is now hearing more often.
In fact, the conditions for savings accounts, time deposits or overnight money are currently improving. Banks without German deposit insurance, for example, are already offering three percent again if you set money for three years. Michael Herte advises caution: "With an inflation rate of eight, nine or ten percent, the current conditions are not all that attractive." Because the bottom line is that the savings still lose their purchasing power.
What's more, if the European Central Bank increases interest rates further, three percent can soon seem rather puny. "It's wiser to choose shorter maturities," says the financial expert. This way you can react better to developments in the coming year. In principle, however, he sticks to the advice: "In the event of inflation, investing in tangible assets such as shares is the better alternative." Provided, however, that you can spare the money for ten years or more.
The development of the popular MSCI World share index shows that staying power is required. The price chart shows the world crises like a fever curve. Shortly after the start of the corona pandemic, the index lost a third of its value in February and March 2020, before almost doubling again by the end of 2021. Since then, the Russian attack on Ukraine, soaring energy prices and central banks raising interest rates have led to a steady ebb and flow. Anyone who invests regularly in the form of a savings plan is still in the black at most starting times.
"There is no panic," reports consumer advocate Herte from the most recent talks, "but some savers are already asking: What's going on? Is the fund broken?" The consumer centers do not comment on specific products, but advise on the division of assets.
Difficult are the cases in which the nest egg is in funds. Experts actually advise keeping three months' salary in the checking or call money account as a reserve for unexpected expenses. If that is not the case, then there is only one alternative: sell at a loss or use the overdraft facility. In contrast to annuity and life insurance, fund savings plans are at least as flexible as possible. "It is always possible to sell shares or to pause for a few months," explains financial expert Herte, "that's a big advantage."
Questions from concerned savers are currently also being sent to Thomas Krüger and his colleagues at Stiftung Warentest. Almost ten years ago you developed the "slipper portfolio", which is intended to enable a simple and convenient investment. Depending on risk tolerance, it consists of 25, 50 or 75 percent shares – for example from an ETF that invests worldwide. The rest of the money is put into a safer interest investment - this is usually a call money account.
Back calculations show that such mixtures develop positively in the long term. However, there are fluctuations in between, which are sometimes more severe. According to Thomas Krüger, the most important question that every investor has to ask himself is: "Can I still sleep peacefully if the stock market collapses by 50 percent tomorrow and will only recover after ten years?" The lower the willingness to suffer, the lower the proportion of shares in the portfolio must be. So it's not about the one right strategy for everyone, but about the right investment mix that suits your personal risk tolerance.
A highlight of the "slipper portfolio" is that the original mixture of equity and interest investments is restored if it has changed too much. In technical terms, this is called rebalancing. If, for example, the equity share has fallen from the desired 50 to 40 percent due to price losses, then the shares are reallocated. "Through this rule, investments are counter-cyclical," explains Warentest expert Krüger. That means: After a stock market boom, profits are secured, after a crash, cheaper buys are made. This rule-based approach has nothing to do with hectic action. According to Krüger's calculations, just eight reallocations would have been necessary in the past 30 years.
Every investor can implement the concept of rebalancing himself. If that is too tedious for you, you can use digital asset management or mixed funds. Of course, the providers charge for this service.
The Arero fund, for example, is a ready-made mix of stocks, bonds and commodities whose weights are regularly reset to their original values. The concept is based on the research results of Martin Weber, economics professor at the University of Mannheim. His conclusion for the turbulent year 2022: "Broad diversification, the diversification of investments, works." All stock markets fell, but the German one more than the American one. And since the dollar has appreciated in value against the euro, a world depot has fared significantly better than a fund based on the Dax.
Weber advises savers to keep calm. They should continue to pursue a plan once they have made it, and above all they should not consider themselves smarter than the financial market as a whole. His rules: "Spread widely, pay attention to the costs and just don't trade too much." Anyone who wants to invest now can do so, depending on their willingness to take risks. "Nobody knows how the stock market is doing at Christmas, apart from Mrs. Schlotterbeck from 'Räuber Hotzenplotz'," says Weber, "because only she has a crystal ball with which she can see the future."
According to the specifications of the stern editorial team, the institute for wealth accumulation identified, examined and compared 53 banks and comparable providers of savings plans in three categories:
- digital asset management
- Investment funds
Some of the larger savings banks and Volksbanks were selected from the regional financial associations.
Four areas were examined and weighted
- Costs: 30 percent (custody fees, issue surcharges, management fees, transaction costs, discount campaigns)
- Requirements: 10 percent (minimum investment, minimum savings rate, clearing account)
- Universe: 30 percent (vendor and product selection, partnerships, risk profiles, security types, sustainable offerings/ESG)
- Service: 30 percent (flexibility of the savings plan, savings plan calculator, product search and comparison, knowledge transfer)
A maximum of 100 points could be achieved. The overall rating is based on the following scale:
- 75 points and more: 5 stars
- 60 to 74.9 points: 4 stars
- 40 to 59.9: 3 stars
- 25 to 39.9: 2 stars
- up to 24.9: 1 star
Providers that have received at least four stars are published.
We only work with test partners with a high level of expertise. This means that the institute for wealth accumulation is also in demand as a service provider in the financial sector. However, the neutrality of data collection and analysis is always guaranteed. The award-winning companies have the opportunity to acquire a star seal. More detailed information can be found here.