The share of cash in Polish investors' portfolios is growing

In the fourth quarter of 2023, stock exchanges grew significantly, but the contribution of cash in the wallets of Polish and global investors also increased. Currently, 2/3 of Poles investing have cash or similar products in their wallet. This choice results from the desire to reduce risk and earn higher interest rates. The rising cost of living is also important - as much as 32%. investors surveyed as part of the study “Pulse of the Individual Investor” eToro, plans to use the cash to pay for rising energy bills or higher food prices.

Poles hold on to cash tightly

According to the Puls Inwestora Indywidualny study conducted by eToro, 66 percent Polish investors in the fourth quarter of 2023 had cash or cash products in their investment portfolio, such as bank deposits, savings accounts or cash funds. The share of cash in investors' wallets is growing - three months earlier, 61 percent had such products in their wallets. investors. This is consistent with the global terrain, as 67% of people in the world held cash. investors, with the largest number in Great Britain - 80%. respondents in this country kept cash in their investment portfolio. The least cash holders were recorded in the Netherlands - only 28%.

Polish investors converted other assets into cash because they wanted to reduce the risk level of their portfolio (22 percent of respondents), because cash products are easily available (19 percent), because they do not require constant monitoring like other asset groups (19 percent). ). Only 15 percent respondents indicated high interest rates as the main reason for increasing the level of cash in their portfolio. Nearly 7 percent stated that they were influenced by the poor performance of other asset classes to choose cash.

Only 26% of respondents plan further investments

Investors' plans for using the accumulated cash are varied. Among those surveyed by eToro as part of the Individual Investor Pulse study, 4 out of 10 investors simply plan to earn interest on the accumulated funds. As much as 36 percent creates a cash-filled rainy day fund to be used when needed. High inflation and a sharp increase in the cost of living in recent years have affected people who invest - as much as 32%. plans to use the cash to pay for rising energy bills or higher food prices. At the same time, 16 percent intends to use cash to pay for increasing mortgage installments or apartment rent. Nearly 14 percent respondents are in the process of purchasing real estate, for which they intend to use some of the cash. However, more than a quarter of investors (26%) are ready for further investments and are waiting for a good moment to exchange cash for other assets.

We are currently observing an increased share of cash in wallets all over the world, and Poland is no exception. This is mainly the effect of high interest rates, thanks to which the interest rate on cash assets often exceeds 5 percent, making them an interesting alternative to the stock exchange. However, we cannot forget that in recent months we have seen strong increases on the stock exchanges. From the beginning of October, Index Wig20 increased by over 22 percent, and the American S & P500 – by almost 13 percent In this case, choosing cash during this period meant lower performance for the entire portfolio.

About the author

Pawel Majtkowski - analyst eToro on the Polish market, which shares its weekly commentary on the latest stock market information. Paweł is a recognized expert on financial markets with extensive experience as an analyst in financial institutions. He is also one of the most cited experts in the field of economy and financial markets in Poland. He graduated from law studies at the University of Warsaw. He is also the author of many publications in the field of investing, personal finance and economy.