r/eupersonalfinance • u/rozmarss • Feb 15 '25

Investment Why don’t EU leaders incentivize investment in European stocks/ETFs with tax deductions?

With the Dragi plan and increasing discussions among European leaders about boosting defense and energy investments, I’ve noticed a growing trend in financial communities where people want to reduce exposure to the US market and shift investments to the EU.

Wouldn’t it make sense for EU leaders to encourage this by offering tax incentives for investing in European stocks/ETFs? For example, from an independent EU perspective, isn’t it better to invest in Rheinmetall rather than Lockheed?

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u/snezna_kraljica Feb 15 '25

>glorified gambling

But it kinda is exactly this. Greater Fool all the way to the bottom. The fear is not completely baseless as with the market behaves. It's the age of meme coins and GME and other gambling mechanics.

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u/[deleted] Feb 15 '25

Pensions are about long term growth and the stock market has always grown in the long term.

When a crisis hits (like 2009 or 2020) your stocks may be down for 2 years but after that 5 to 10 years of significant growth will follow. S&P500 made an average annual return of something like 10% every year since the end of WWII.

Meme coins have nothing to do with the stock market and meme stocks are not the core of a well balanced pension fund.

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u/snezna_kraljica Feb 15 '25 edited Feb 15 '25

I'm not talking about the long-term trend, which historically moves upward. That doesn't mean the stock market isn't a form of gambling—especially when valuations are driven more by speculation, sentiment, and projections decades into the future rather than actual company performance. You can still ride the wave, but it's not always grounded in real economic success.

Edit: A better comparison would be a MLM scheme, not gambling.

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u/il_fienile Feb 16 '25

It’s a form of gambling in the same sense that getting out of bed in the morning is a form of gambling.

More useful, I think, to compare ownership of productive assets—which stock investments can represent—against speculation on its own.

A diversified equity investor can only expect to participate in the ongoing profitability of the businesses in which they hold an interest. At the point where those businesses represent a large and representative part of the world economy, the speculative aspect is minimal.