The financial savings of Spanish families stands at 2.3 trillion euros, according to data provided by the Bank of Spain in September 2020, 200% of Spanish GDP. These savings include deposits and cash, investments through collective investment, pension funds, direct investment, insurance or other options.
However, of all the savings formulas in financial assets, it is necessary to highlight the role played by deposits and cash with accumulated savings of 947,400 million euros, which represents 41.8% of the total.
We could think that the weight of deposits and cash occupy a high weight over total financial assets due to the crisis, but no, the truth is that it is not about the conjuncture but it reaches structural reasons: historically savers have preferred deposits and cash over other investment formulas.
In fact, in the last decade, deposits and cash have occupied around 40% of the financial savings of Spanish families, this data is ten points higher than the European average. And it acquires relevance because, in the last ten years, a 0% interest rate policy has been imposed by the ECB and, therefore, this category of investment mentioned is among the least profitable that we can find.
The Spanish investor is extremely conservative since it mainly channels savings through the purchase of your home and through the deposits already mentioned. It tends to flee from the volatility offered by financial markets. This aversion to fluctuations in prices means that they do not overweight options such as direct investment, investment funds or pension plans.
Furthermore, when investing, the conservative profile predominates. In the portfolio of investment funds, fixed income is weighted around 50%. It must be taken into account that long-term euro fixed income has reported an annualized return of 2.33% in the last 10 years. That is, they have covered inflation and little else.
That fear implies a problem. In an environment of low or negative interest rates, saving is not paying off, and inflation, even if it is very low, depreciates that saving.
If in 2011 demand deposits offered 0.30% and one-year time deposits reached 2.70%, today both products report a remuneration of 0.01%, which means assuming a negative real profitability due to weak but positive inflation.
On the side of the acquisition of housing as an investment, in general terms, housing tends to rise over the years in the same way as the cost of living (Sometimes there can be moments of irrational exuberance in which both tendencies diverge but tend to converge).