• About us
    • Who we are
    • Mission
  • Contacts
  • English
    • Português (Portuguese (Portugal))
    • Español (Spanish)
    • Français (French)
  • Login
Investorpolis
[xyz-ips snippet="Banners-Publicitarios"]
No Result
View All Result
No Result
View All Result
Investorpolis
No Result
View All Result
Home Wealth and Investing Wealth

Households with higher incomes invest the same way

24 de May, 2020
in Wealth, Wealth and Investing
Reading Time: 5 mins read
0 0
0
Share on FacebookShare on Twitter

Despite asset allocation differences between countries driven by social-economical and wealth reasons, the richest households (High Net Worth Individuals) in any part of the world invest their financial assets in the same way: 28% in cash, 26% in shares, 18% in bonds, 16% in real estate and 14% in other alternative investments

Households in advanced countries invest more in financial markets than those of countries in the less developed

American and European households invest more in the stock markets than those of other regions

However, when we focus only on the high net worth individuals, they invest their assets in the same way in any country in the world

Households in advanced countries invest more in financial markets than those of countries in the less developed

Household assets can be invested in financial assets, including shares and bonds, or in real assets, the most relevant being real estate.

When we look at the world there are great regional differences in terms of asset composition and distribution of financial investments.  

In the more advanced economies people invest more in financial markets.

In the US, households net worth (deducted from debts) of invested in financial assets exceeds 60%, in Japan and in some European countries such as Denmark and Switzerland the 50% while in emerging countries such as China and the Czech Republic this percentage is 40% and India and Indonesia is still well below, between 1% and 20%.

American and European households invest more in the stock markets than those of other regions

However, in developed countries there are still differences in the distribution of investment by financial assets classes.

The US invests the most in stocks, with a weight of 45%, followed by Sweden and Canada with percentages close to 40%. 

Households in major European countries such as Italy, France and Germany invest about 20% in shares. In Portugal, the value is less than 15%.

In Japan, household investment is mainly made in deposits, with the weight of shares insignificant and little higher than Slovakia.

In Europe, emerging or less developed economies also place most of their financial assets to liquidity and deposits. 

Traditionally, US households invest heavily in stocks.

In the US the allocation to shares is high with values in the range of 40% to 55%, to bonds is about 20% and cash at 25% to 30%.

These cultural aspects are intrinsically linked to the civilizational roots of US creation and development, but also of the growth of the capitalist economy and the world’s largest capital market, which underlie this situation.

Investment in stock markets is also important in Western Europe, and very low in emerging economies.

European households invest 30% in the stock markets and those of emerging countries allocate no more than 8% to 20% of their financial assets to these markets.  

In Japan, very little is invested in stocks. Most financial assets are bank deposits.

This is largely due to the devastating effects of World War II on the Japanese economy and more recently to the debacle of the Japanese miracle since the early 1990s that destroyed much of the wealth invested in stocks.

However, when we focus only on the high net worth individuals, they invest their assets more or less in the same way in any country in the world

The High Net Worth Individuals are those who have a net worth available for investment (excludes own housing) exceeding 1 million U.S. dollars.

In 2018, there were about 18 million of these people worldwide:

6.1 million live in Asia Pacific, 5.5 million in North America and 3.8 million in Europe.   

In terms of countries the situation is as follows:

5.3 million live in the US, 3.2 million in Japan, 1.3 million in Germany and China, 600,000 in France and the United Kingdom, 400,000 in Switzerland and Canada.  

The allocation of assets of these people in the various regions of the world is as follows:

We see that the allocation of assets of these high net worth people is quite uniform in the various regions, being about 28% applied in savings and deposits, 26% in shares, 18% in bonds, 16% in real estate and 13% in alternative investments.

In conclusion:

  1. The differences in household investments are fundamentally explained by underlying cultural, economic and social reasons: the Western capitalist models and that of the Asian countries in which it exists; the way people relate to the state, namely nation-state versus civilization state; differences in household disposable income in the world; the degree of development and historical performance of financial markets and shareholders in advanced geographies.
  2. However, at the level of the wealthiest families there are great similarities because these families are more global than local, more alike, resulting in a great similarity of these aggregates in terms of cultural, social and economic attributes.
Previous Post

Investing in index mutual funds or products: The main bond markets indices

Next Post

Investor biases: As investors we are our worst enemy

Investadmin

Investadmin

Related Posts

Effects of Trump’s Trade Tariffs on Financial Investments Series: P1 – Framework
Investing

Effects of Trump’s Trade Tariffs on Financial Investments Series: P1 – Framework

8 de May, 2025
Series Investments in the Artificial Intelligence Cycle: Part 2 – The main branches of AI
Investing

Series Investments in the Artificial Intelligence Cycle: Part 2 – The main branches of AI

29 de April, 2025
2Q25 Financial Markets Outlook: Zombieconomics, or the monumental cost of Trump’s astronomical reciprocal tariffs
Investing

2Q25 Financial Markets Outlook: Zombieconomics, or the monumental cost of Trump’s astronomical reciprocal tariffs

4 de April, 2025
Thematic Investments Series: Part 3. What are the main megatrends?
Investing

Thematic Investments Series: Part 3. What are the main megatrends?

28 de March, 2025
Thematic Investments Series: Part 2.2. Disruptive technology or innovation – The domains of disruptive technology or innovation
Investing

Thematic Investments Series: Part 2.2. Disruptive technology or innovation – The domains of disruptive technology or innovation

17 de March, 2025
Investments in the Artificial Intelligence Cycle Series: Part 1 – Definition and History of Development
Investing

Investments in the Artificial Intelligence Cycle Series: Part 1 – Definition and History of Development

20 de February, 2025
Next Post

Investor biases: As investors we are our worst enemy

Leave a Reply

Your email address will not be published. Required fields are marked *

Trending

Effects of Trump’s Trade Tariffs on Financial Investments Series: P1 – Framework

Effects of Trump’s Trade Tariffs on Financial Investments Series: P1 – Framework

8 de May, 2025
Series Investments in the Artificial Intelligence Cycle: Part 2 – The main branches of AI

Series Investments in the Artificial Intelligence Cycle: Part 2 – The main branches of AI

29 de April, 2025
2Q25 Financial Markets Outlook: Zombieconomics, or the monumental cost of Trump’s astronomical reciprocal tariffs

2Q25 Financial Markets Outlook: Zombieconomics, or the monumental cost of Trump’s astronomical reciprocal tariffs

4 de April, 2025
Thematic Investments Series: Part 3. What are the main megatrends?

Thematic Investments Series: Part 3. What are the main megatrends?

28 de March, 2025
Investorpolis

We developed this blog because we believe that only a small learning effort is needed to make a big change in the decisions and results of our investments and financial assets.

Main categories

  • Investing Series Guide
  • Wealth and Investing
  • Retirement & Savings
  • Tools
  • More

Newsletter

Sign to our mailing list to receive updates direct to your inbox!

*We don’t spam

  • Privacy Policy
  • Cookie Policy
  • Contacts

© 2021 - Investorpolis / Powered by Delta Soluções

  • pt-pt Português
  • fr Français
  • es Español
  • en English
  • Home
  • Investing Series Guide
    • I. Goal Based Investing
    • II. Compounding & Inflation
    • III. Assets Risks & Returns
    • IV. Efficient Diversification
    • IX. Sustainable Investing and ESG
    • V. The Investor
    • VI. Assets and Investments
    • VII. Index Funds
    • VIII. Successful Investing
    • X. Kits and Tips
    • XI. Other Topics
  • Retirement & Savings
    • Retirement
    • Savings
  • Wealth and Investing
    • Investing
    • Wealth
  • Tools
    • Calculators
    • Publications
    • Sites and apps
  • More
    • Best of
    • Reviews
    • Snapshots
    • Others
  • About us
    • Who we are
    • Mission
  • Login
  • Cart

© 2021 - Investorpolis / Powered by Delta Soluções

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
Cookie configurationCookie PolicyAcceptReject
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Necessary
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
SAVE & ACCEPT

Add New Playlist

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?