Stockholding in Europe: Evidence from the Consumer Expectations Survey

This working paper examines stock market participation trends among European households using survey data from eleven euro area countries from 2020 to 2024. It documents significant turnover in market participation, noting that approximately 10% of non-stockholders enter the market annually, while over 20% of stockholders exit. The findings indicate that new entrants typically possess lower education, income, financial literacy, and risk tolerance compared to established investors, suggesting a shift in the demographic profile of market participants. The paper also highlights the increasing relevance of cryptocurrency investments among retail investors, with about 8-10% of households owning crypto assets, primarily for speculative purposes. The analysis identifies barriers to stock market participation, including financial constraints, lack of knowledge, and distrust in financial institutions, which affect both entry and retention in the market. The results imply that enhancing financial literacy and addressing behavioral factors are crucial for increasing household engagement in capital markets.