Deutsches Aktieninstitut’s Return Triangles onto the desks of political decision-makers

Regular, long-term investment in a diversified portfolio of shares is the ideal instrument for retirement provision and wealth formation. Investors who invest in equity funds, ETFs and equities on a long-term, diversified and continuous basis can generate returns of six to nine per cent per year, as shown by the Return Triangles published today by Deutsches Aktieninstitut. 

‘2024 was a good year for shareholders. The German stock index DAX rose by almost 19 per cent. However, the long-term investment horizon is more important than looking at the development of a single year. Our Return Triangles show that patience pays off in the stock market. Investors who stay on course can generate solid returns of six to nine per cent per year on average,’ explains Henriette Peucker, Chief Executive and Member of the Board at Deutsches Aktieninstitut. ’This makes equity investments an ideal component for retirement provision and building up financial reserves.’

For example, someone who has invested 50 euros a month in the DAX over the last twenty years with an equity fund or ETF savings plan has achieved an average return of 7.8 per cent per year. A total of 12,000 euros paid in over 20 years grew to around 28,000 euros. The amounts paid in have thus more than doubled. 

Return Triangles onto the desks of political decision-makers

Deutsches Aktieninstitut's Return Triangles can also be a guide for important political decisions. ‘The opportunities for high returns on long-term equity investments should finally be used in the pension system as well. The right incentives for more equities in both statutory and private pension provision must be set,’ emphasises Peucker. ‘I would like to see the Return Triangles given a prominent place on the desks of political decision-makers.’

Any further additional tax or social security burden on capital gains sets completely the wrong incentives and harms those who improve their financial security and provide for their old age by investing in shares. This would particularly affect people on average incomes. 

Return Triangles for various indices

Deutsches Aktieninstitut traditionally updates its Return Triangles at the beginning of the year. These Return Triangles illustrate historical stock market returns. There are different versions of the Return Triangles. The Return Triangles for the DAX are calculated for both a lump-sum investment and a monthly investment like a savings plan. For the MSCI World, the Return Triangle is only available for the savings plan, and for the EURO STOXX only for one-time investments.

Note for banks and insurance companies: It is possible to use the Return Triangles as an information service in investment advice. A licence must be purchased for this. For more information, please contact Claudia Brehm (brehm(at)dai.de).

 

Appendix – Regular equity saving for different investment periods

Based on the DAX Return Triangle for monthly investments of the German Equity Institute, the following table shows how a regular investment in the stock market – e.g. with a savings plan with funds or ETFs – has developed over the last 20, 30 and 40 years. The end date in each case is 31 December 2024. 

The costs of buying or selling securities are not considered. The same applies to other costs that may arise depending on the form of the monthly share savings plan, as well as any taxes. The information is rounded up or down to the nearest decimal.