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The scars of the crisis still linger

Spanish investors remain more conservative than those of other countries due to the effects of the recession

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The scars of the crisis still linger

The last great financial crisis, which started over a decade now, continues to determine form of investment of spaniards. Still have major scars on that and are more conservative than "normal". According to latest survey of international management Legg Mason Global Investment Survey, 75% of investors/savers Spanish continues to have memory (in this case, bad) of what happened from 2007-2008 and during years in financial markets, stock market and real estate. This trait can cause m in ir current decisions with a lot more force than it does in case of or european investors; crisis is past is relevant only to 20% of swedes, 40% German or 50% of british.

For Javier Mallo, head of Legg Mason for Spain and Portugal, Spanish used more than ors this rear view mirror to decide where to place ir savings has to do with "a certain lack of vision in medium and long term, that is to say, a lack of planning; perhaps, with a child still experience financial, same as with a still insufficient culture in this field and also with evolution that have had, among ors, stock markets are at this time".

John O. Navarrete, independent financial adviser for years, insists on last of reasons given Mallo as a determinant to explain Spanish case. The index Standard&Poor's 500, remember this expert, marked its lowest level in 2009 at around 670 points; today it is around 2500 points: a gain of over 300% which rub pretty bad memories. "In Spain, Ibex 35 touched minimum in summer of 2012 to break down barrier of 6,000 points; today it is in 10.400 points. The gain is a little more than 70% but... compared to 2008, when this indicator was at beginning of November, close to 16,000 points, loss is still 35%," says Navarrete.

The memory of crisis is not, in Spanish case, in addition to exclusive (and conditioning) for those who lived and suffered through this crisis in ir own heritage but, as indicated by this study, for all investors regardless of ir age. Interestingly, generation with more intensity is left to influence in this regard are so-called millennials, who are now between ages of 18 and 35 years; almost 40% of m suffers from bad memories, compared to 20% of Generation X (between 36 and 52 years) and 27% of baby boomers (53-71 years).

Trait intergenerational

If you consider this "dependence" of crisis, is best understood as a conservative of investor profile of Spanish. No matter generation of which you speak: percentage of portfolio that is intended to Bag is situated in all cases between 16-17%, a small portion compared to money in liquidity, which exceeds in all cases 30%, or fixed income that comes in, in case of millennials, 20%.

The striking thing of this conservatism is that it does not prevent objectives of profitability of Spanish investors continue to be high: baby boomers, according to data from survey of Legg Mason, want to achieve a return of 6,45%; Gen X, until a 7,83% and millennials, a 7,39%. As yields achieved are not such, y generate important gaps of profitability in future, says Navarrete, "iran gets older if he continues without giving some input to risk, if not used services of professionals that require a proper planning and diversification of portfolios".

According to data of this survey, 43% of millennials are willing to assume a little more risk in ir portfolios compared to 22% -23% of or generations and, however, Javier Mallo insists that doing so is probably only alternative to maintain adequate levels of profitability. "If one takes into account that for three generations analyzed investment in international equities is one of alternatives that offers best opportunities for appreciation for next few months, it seems essential to give input in financial advice". The reality is that only 38% of baby boomers is currently using services of a financial professional; y do 43% of investors of generation X and 49% of millennials. In judgment of Mallo, "perhaps this is reason that latter intended to mean a 33% of your portfolio to international assets as compared to 11% of baby boomers."

Aitor Jauregui, head of business development BlackRock, acknowledges that conservative profile is very deep rooted in Spain —according to its own survey 47% of respondents had planned for this exercise to increase ir allocation to cash— and that "in fact, financial education is one of major challenges facing investment industry in Spain". In his opinion, situation is changing and will do more in future, among or reasons, because "Spain is already european country with greater use of technology for monitoring and online control of ir finances (72%), compared to for example Uk (57%), Germany (56%) , Italy (64%) or France (53%)".

In this regard, and according to survey of Legg Mason, while it is true that in order to manage ir personal finance investors are increasingly turning to pages specialized in finance, web pages, applications, financial intermediaries...t he thing is that y mselves declare, at margin of ir age, that ir preferred source of information on savings and investment remains to speak with a professional face-to-face.


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