New research conducted by SEC Newgate for ASIC revealed since 2020 Aussie investors are investing and trading Australian shares and cryptocurrency more than any other investment type.
The survey across 1,053 retail investors aged 18 and over conducted in November 2021, provided a snapshot of investor behaviour during a period of increased activity in retail markets.
ASIC notes despite recent changes to economic conditions since the research was conducted, retail market activity has generally remained elevated this year compared to pre-pandemic levels.
ASIC Chair Joe Longo said the growth in retail markets since COVID-19 has fuelled changes to the mix of product types being traded.
“The research also confirms the prominence of digital and social channels as sources of information for investors, and the diversity in trading platforms they use," Mr Longo said.
The research detailed the investment products that had been invested or traded the most since March 2020 were:
- Australian shares (72%)
- Cryptocurrencies (52%)
- International shares (32%)
- Investment properties (31%)
- ETFs (30%)
- Gold or silver (30%).
The most experienced investors, at 86%, were more likely to report holding at least one type of Australian share in their portfolio, compared to moderately experienced investors at 67% and recent investors at 67%.
Further, 55% of recent investors and 52% moderately experienced investors were twice as likely to hold at least one type of cryptocurrency in their portfolio compared to 22% of the most experienced investors.
By age, 58% of those between 18–34 was significantly more likely to report owning at least one form of cryptocurrency when compared to 46% of those aged 35-54 and 20% of those aged over 55.
Those aged 55 and over were instead more inclined to report owning at least one type of Australian share, 81% compared to 64% of those aged 18–34.
For investment security, gold or silver were perceived by 47% of retail investors as the lowest risk investment product, followed by ETFs at 37%.
Mr Longo said ASIC is concerned about the number of people surveyed who reported investing in unregulated, volatile crypto-asset products.
“This research does highlight during this particular point in time, the appeal of crypto-assets to the market,” he said.
“According to the survey, only 20% of cryptocurrency owners considered their investment approach to be ‘risk-taking’, raising concerns that investors did not understand the risks of this asset class.”
Digital platforms hold the key to making informed investment decisions
SEC Newgate research revealed the most selected influences upon the investment decisions were family or friends at 27%, wanting to generate another income stream at 26%, and wanting financial independence at 23%.
Despite inner circles holding an influence upon investment decisions, retail investors are turning to digital channels and social media platforms to source investment information.
The main types of information sources included:
- 34% of surveyed investors reported sourcing information from Google searches.
- 41% of investors surveyed reported sourcing information from social media and networking platforms such as Facebook, Reddit, TikTok, Instagram, YouTube, Podcasts and/or Blogs.
Investors aged between 35–54 are more likely to report accessing investment information from Google searches at 40% compared to those aged 55 and over at 19%.
Investors look to place tax returns into stock market
Research from share trading platform Superhero revealed 50% of investors are planning on investing this year’s tax return into the stock market - if they do in fact get one.
Surveying 1,300 Superhero investors, the data revealed 59% of female Superhero investors intend to place tax returns in the stock market, compared to 48% of male Superhero investors.
Further, 62% of Superhero investors aged between 18-24 said they are planning on using the new financial year to sort out their financial goals for the year ahead.
Superhero CEO and co-founder John Winters said there appears to be a sense of optimism about the market, and a renewed focus to use the current state of the market as an opportunity to grow wealth.
“It’s refreshing to see a generational attitude where personal finances and financial wellness are prioritised from a young age,” Mr Winters said.
“With nearly half our Superhero investors being regular investors, it’s positive to see that the current dip in the market has not deterred investors from their strategies when it comes to growing their wealth.”
With investors looking to place tax returns into the stock market, Wealth Within Chief Analyst Dale Gillham said the strong move up in July for Australian stocks is a very good sign, however, markets don’t just rise, they move up in stairs.
“We are in reporting season and while we will see some good results, you need to expect the unexpected, which means the market or stocks you are looking at may be volatile for a short period of time,” Mr Gillham said.
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