They rarely invest money in securities (only 7%, according to VTsIOM). The most reliable investment is considered (1) real estate (46%) and bank deposits (29%).
Let’s take a look (2) at similar statistics in the US. Stacking up the accumulated money is an unpopular idea among Americans. Much more often funds are invested in financial and non-financial assets. The most popular investment vehicles are stocks (35%), real estate (25%) and retirement savings (22%).
Why is there such a strong investment culture in the United States and why is it common to buy securities? We understand the article.
Why do Americans invest
Debt management. Paying off loans is the new American dream. Brokers help potential investors to close high-interest loans while setting aside small amounts for the future.
Budget management. Financial stability is about earning more than you spend and saving for unexpected expenses. The goal of the strategy is to have a free 15% of the budget that can be invested.
Pension savings. Regular replenishment of retirement accounts and augmentation of funds through investments
Americans use a variety of tools to achieve these goals.
Stocks are the most popular investment vehicle in the USA
One in two Americans uses stock market instruments to increase their capital. This is no exaggeration – according to a Gallop survey (3), in 2016, 52% of the US population had securities in the form of securities. This figure is incomparably lower and is only 7%.
The US stock market is large, transparent, and well regulated. Many ordinary people (students, housewives, teachers) invest in this tool. It heals the stock market: stocks are well-traded and can be sold quickly. Novice investors set themselves a long-term financial goal and entrust their funds to a personal broker.
Interest on bank deposits in American banks is ridiculously low, and investments on the stock exchange consistently bring (4) 5-15% per year – that is, investing in stocks is really profitable.
Of course, stock trading involves risk. If assets are mismanaged or the market crashes, you can lose your money. The risk payment was the highest average stock return – 11.5% over the past 90 years (5). This is the highest result among all types of investments in the American market. Conservative investment strategies and the services of financial advisors and personal brokers help reduce risks.
“Investing is right!” This idea is constantly being broadcast to a wide audience of US residents. Stock reports appear on TV channels as often as the weather forecast. The media tell the personal stories of people who made their fortunes buying and selling securities. After the market collapse in 2008, there is some distrust of stocks on the part of a younger audience (6), but on the whole, this investment instrument is confidently leading.