This year the Belgian investor preferred to safeguard his or her money. During the first two months of 2010 Dexia has seen a growth on savings deposits by 2 billion Euros. This is the third year in a row in which their savings accounts increased. In 2007 they were at their lowest point, in this period between 21 and 22 billion Euros was on the savings accounts of Dexia Belgium. At the end of last year the total amount was 28 billion, which went up to 30 billion at the beginning of this year.
This indicates that also this year people prefer a deposit account with little return instead of a risky investment which probably will have a higher return such as the stock market, funds and so on. As an alternative the customers keep their money in liquid, instead of investing it on a longer notice.
It’s also a fact that money from earlier investments that has reached its expiry date flows in large numbers to the savings accounts. We must also admit that the interests on the deposit accounts paid in January, have hardly been invested. According to Marc Lauwers, Head of Retail & Commercial Banking for Dexia Belgium, the attitude of customers is perfectly comprehensible. People are waiting for an increase of the low market interest. Although the interest probably won’t go up this year, banks should definitely be prepared for a similar situation.
In spite of the success of the savings account, Dexia also noted down a growth in deposit bonds. At the end of February the amount of deposit bonds was 13.1 billion. Near the end of 2009 this number was more or less 12.9 billion. This growth is due to extensive commercial efforts of Dexia last year. At that time they recommended deposit bonds of which the benefit was intended for financing projects of local governments.
Out of these figures I am able to conclude that the majority of customers still haven’t forgotten the crash on the stock exchange in 2009. That’s why they consciously chose an investment without any potential loss of their savings. In my opinion it’s a shame that most people have stopped investing in the stock exchange. I can understand their intentions but they seem to have forgotten that it’s not a constructive decision to park your savings on a savings account at the moment. Bearing in mind that the return on deposit books is even lower than the inflation, in fact it means that you’re obviously losing money each year. In other words, this means that after one year of time, you won’t be able to buy the same amount of products or services with your money, together with your savings. The best way to invest your money these days is opting for a long term investment.
Possibilities in order to follow my advice are deposit bonds, debentures, and share funds. In contrast to what most people think, you cannot lose money with these investments. In addition, investing in real estate is also a feasible opportunity. Whatever you do, keep in mind that it’s important to stay up to date of the opportunities and dangers of the market.
Finally, some advice for investors: Don’t invest in something when you don’t know what’s inside the package.
Sources:
Article on Nieuwsblad.be
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