Risky Asset Holdings during Covid-19 and Their Distributional Impact: Evidence from Germany

Discussion Papers 1962, 31 S.

Lukas Menkhoff, Carsten Schröder


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We present evidence from a repeated survey on risky asset holdings carried out on a representative sample of the German population six times between April and June 2020. Given the size of the Covid-19 shock, we find little evidence of portfolio rebalancing in April 2020. In May, however, individual investors started buying heavily, fueling market recovery. The cross-section shows large differences as young, educated, high income, and risk tolerant investors are net buyers throughout and, thus, benefit from the stock market recovery. Older individuals, parents of young children, and individuals affected by adverse liquidity shocks from Covid-19 are net sellers. Given the high risk of illness, older people are hit by dual blows to both health and finances.

Lukas Menkhoff

Head of Department in the International Economics Department

Carsten Schröder

Vize-Direktor SOEP und Bereichsleitung Angewandte Panelanalysen in the German Socio-Economic Panel study Department

JEL-Classification: D31;G50;H31
Keywords: Risky assets, distributional effects, individual investment behavior, health and income shocks, expected adverse shocks