An Australian study could reveal some surprises when it comes to the investment preferences of both young and old.
If you thought cash savings or investment property were the most popular retail investment choices among Aussies, a recent study by the Australian Securities Exchange (ASX) revealed that it was in fact shares, along with other on-exchange investments*1.
The 2017 report, prepared by Deloitte and based on a survey of 4,000 people, made some interesting discoveries, with the number of young investors doubling over five years and more people under the age of 35 opting for stable returns in comparison to their older counterparts2.
Some key statistics from the report revealed3:
60% of Aussie adults hold investments outside of their institutional super fund
62% of investors hold on-exchange investments, 56% hold cash, and 37% hold property
The number of investors aged 18 to 24 doubled from 10% to 20% over five years
The number of investors aged 25 to 34 increased from 24% to 39% over the same period
81% of investors under age 35 are seeking guaranteed or stable investment returns
41% of investors over age 55 are comfortable with some variability in their returns
60% of all investors access professional advice to help them make investment decisions
15% of adults have a self-managed super fund, with 30% planning to set one up.
Top three goals: Accumulating wealth, saving for a home deposit, saving for travel
Risk appetite: 81% want guaranteed or stable returns from their investments
Return expectations: around 8.2%
Investment mix: 44% cash, 31% shares, 25% investment property, 22% other on-exchange investments
Access financial advice: 37%.
Top three goals: planning for retirement, accumulating wealth, supplementing current or future income
Risk appetite: 67% want guaranteed or stable returns from their investments
Return expectations: around 9.2%
Investment mix: 53% cash, 51% shares, 42% investment property, 25% other on-exchange investments
Access financial advice: 44%.
Top three goals: planning for retirement, supplementing current or future income, accumulating wealth
Risk appetite: 60% want guaranteed or stable returns from their investments
Return expectations: around 8%
Investment mix: 68% cash, 58% shares, 26% investment property, 18% other on-exchange investments
Access financial advice: 52%.
The majority of non-investors (54%) indicated that a lack of money was the reason behind why they did not invest, with the second biggest reason being they lacked confidence in their ability to do it7.
The report indicated however, that many non-investors were younger people who did not yet have the level of income to invest, adding that non-investors also had different financial goals when compared to those who invested8.
“While investors are focused on the long term (saving for retirement, wealth accumulation, supplementing income), non-investors are interested in the shorter term,” the report said, pointing to their goals including things such as travel, paying off debt and saving for a rainy day9.
Other reasons people didn’t invest included perceived costs, needing advice but not knowing how to find it or what they’d be charged, concerns around volatility, and a lack of interest and time10.
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* On-exchange investments refer to listed investments and other financial products available on a financial exchange and held through unlisted managed funds, such as shares, derivatives, and other products such as bonds and exchange traded funds.
1 – 10 ASX Australian Investor Study 2017 pages 1, 2, 20, 40, 41, 42, 43
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