European households moved further into stocks after the pandemic

European households appear to have kept part of their pandemic-era shift toward investing, according to survey evidence cited by Christelis et al. For everyday investors, the key point is that more household savings in Europe are now tied to stocks and stock funds, meaning more people are exposed to market gains and losses than before 2020.

The research, based on surveys across 11 European Union member states, found that from 2020 through 2024, roughly 10% of people who had not previously invested entered the stock market for the first time in each year. Stock market participation means a household owns individual shares or stock funds, which are pooled investment products that hold shares on behalf of investors.

That marks a shift for a region where direct stock ownership has long been lower than in the U.S. and the U.K., according to the discussion of the study. The change does not mean Europe has suddenly adopted an American-style investing culture. It does show that the pandemic period brought in a meaningful group of first-time investors, and that enough of them remained invested to lift overall participation rates.

Germany and the eurozone saw clear gains

By November 2024, more than half of German households held stocks or stock funds, according to Christelis et al. That was up from about 40% in mid-2020.

The broader eurozone also saw a rise. Participation increased to about 40% from about 30% over the same period, according to the study.

The German figures matter because German households have often been described as cautious investors. Klement on Investing has argued that lower willingness to take investment risk can weigh on wealth accumulation. In that analysis, Germans can save at higher rates than households in other countries without necessarily ending up with larger retirement assets later in life.

The basic mechanism is straightforward: cash savings are more stable, but they usually do not participate in corporate earnings growth the way stocks can. Stocks also bring the risk of losses. A higher participation rate means more households are choosing to accept some of that market risk through shares or stock funds.

New investors also left at a notable rate

The increase was not a one-way move. Christelis et al. found that exits from the stock market were equal to about 20% of the existing investor base. In other words, for every group already invested, a meaningful share stopped investing during the period studied.

Those exits rose around two moments identified in the study: the final winter of the pandemic and the start of the inflation surge in 2022. Inflation means prices are rising across the economy, which can pressure household budgets and change how people think about savings and risk.

Even with that churn, overall participation was still higher by 2024. That suggests the pandemic did more than create a short burst of trading activity. It also left Europe with a larger base of households holding stocks or funds than before.

Crypto ownership stayed far smaller

The same study also looked at cryptocurrency ownership in the EU. According to Christelis et al., about 10% of EU households invested in crypto assets, and that share remained broadly steady.

As with stocks, many households entered crypto during the pandemic. But the study found that new crypto investors faded after the pandemic period ended. On the numbers reported, Europe’s move into crypto looks much less durable than its move into stocks and stock funds.

This story draws on original reporting from Klement on Investing.