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Guest commentWorst investor ever

My best friend's birthday is on September 15th. He is a typical German investor with an academic background. After completing his studies, he let himself be tapped by the so-called MLP consultants and invested in some construct of insurance and equity investments. His stake in that package is bobbing about and he's not quite sure why. The fund manager as well as the seller at MLP know for sure. But back to his birthday, he's 38 now.

Exactly ten years ago, the US bank Lehman Brothers collapsed on his 28th birthday in 2008. What a lousy day to buy stocks. If he had invested all of his money in the Dax on that day - a disaster. He would probably have been the worst investor in the world with the worst timing. After that, the German share index went down to 3600 points in March 2009. In such situations, German investors in particular tend not to touch shares under any circumstances. And they let themselves be infected by all kinds of doom scenarios. So in March 2009, nobody wanted Infineon, SAP, Allianz and other Dax stocks. And then?

Then the big wailing of the so-called small savers began. The expression "small savers" alone highlights the submissive attitude of most Germans towards stocks. Ten years after Lehman, many of them complain about zero interest rates and loss of wealth, including my best friend. The problem, however, is you yourself, the problem is yourself. Knowing about the possibility of savings plans with index certificates or passive funds (ETFs), knowing about the options offered by companies like Lyxor, for example, constructs acquired after graduation are fed instead shut them down. Or - level two - you pay money into one of the many actively managed funds every month, which cause a lot of costs, but only in very rare cases achieve a higher return than passive investments.

In such cases, the fund industry is used to saying that one takes active countermeasures in downward phases, and that the fees are worth it. The crisis of 2008 to 2009 showed very well that active funds are often fully involved on the downside and re-enter too late on the upside.

The phenomenon of small savers

But back to the small saver. For many economists and analysts who are well-known on TV, the analyzes of the financial crisis often begin with the sentence that the crisis “cost the German small saver x billion”. Fans of Hans-Werner Sinn or Jens Weidmann go crazy with happiness when they read such apparently comforting sentences. In reality, advisors like Sinn or Weidmann cost billions - including my friend.

The experts from the Sinn brand have failed to understand that the world has consisted of the debt system for centuries. Someone lends money to another so that he can invest, consume or build. There is interest for this and most of the time this interest is paid back. In the private sector, the loans are even being repaid, while in the case of states, debt rescheduling takes place. Or has the US ever paid off debts?

Has Germany ever paid off debts apart from a few billion in recent years? The few billion that Wolfgang Schäuble was able to repay came about because ECB boss Mario Draghi paved the way for him with a counter-Weidmann policy and Germany was temporarily thrown fresh money afterwards at zero interest rates. Nice for Schäuble, bad for my friend who has cash in the bank and avoids stocks. You are dangerous.

Recalculated and wondered

But let's do the math. In the event that he really was the worst investor of all time, then he would have invested, say, 50,000 euros in the Dax on September 15, 2008. The Dax was listed at 6064 points, first losing a whopping 40 percent of its value by March 2009. Creepy. And now? Now the Dax is listed at 12,128 points on September 17, 2018 and, curiously, that is exactly 100 percent more than then. 100 percent divided by 10 means nothing more than dividends, including 10 percent per year as a return. That wouldn't have been bad for the worst investor of all time. My dear friend, happy birthday. As a gift, this sample calculation is another encouragement to buy shares. Then there are the details with a good bottle of wine.

Daniel Saurenz operates the investment and investment portal Feingold Research. The journalist has written for Börse Online and the Financial Times Deutschland, among others