• Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint

The German Experience

Germany went through an Internet bubble, just as did America, but with considerably less damage to the small investor. In Germany, small investors didn't get sucked into the speculative frenzy to the degree that in America destroyed the savings and pensions of many people. There were several reasons for this.

First, in Germany the individual has far less control of her or his pension money than in America. Germany has a state-run pension plan which has little room for corporate-managed defined benefit pension funds of the older American type, and none at all for pension plans managed by the individual. Hence, Germany has no 401(k) plans or Individual Retirement Accounts which leave to the individual the direction of his or her pension assets. During the bubble, this looked like a shortcoming of the German system, for American investors were showing much more rapid appreciation in their portfolios. Then the bubble broke, and today the German system looks better.


PREVIEW

                                                                          

Not a subscriber?

Start A Free Trial


  
  • Creative Edge
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint