- Only 7 per cent of Australian retail investors sold investments during recent stock market sell offs and 25 per cent bought the dip, similar to their global peers.
- Three out of four (75 per cent) of Aussie retail investors say they are “quite confident” or “very confident” in their investments.
- 48 per cent of global investors plan to invest the same amount of money over the next three months and 30 per cent expect to invest more.
Sydney, July 8, 2022: Global retail investors around the world remain resilient despite stock market sell offs and recession fears, with nine in ten (92 per cent) either holding onto investments or buying the dip, according to the latest ‘Retail Investor Beat’, a quarterly survey of 10,000 global retail investors across 14 countries, including 1,000 in Australia, from social investment network, TBanque.
Less than one in ten (8 per cent) global investors sold their investments during the recent stock market sell offs, two thirds (64 per cent) held firm with their positions and another 28 per cent bought the dip. In Australia, the sentiment was quite similar, as 7 per cent of retail investors opted to sell, 68 per cent held their investments, and 25 per cent bought more while the prices were down.
“Despite a barrage of setbacks across global financial markets, retail investors in Australia and around the globe have found the strength to look past the short term volatility and use these drops in prices to bolster their portfolios for the long term. With bull markets ultimately built on the shoulders of bear markets and near four times the length and magnitude, staying the course and repositioning their portfolios should serve these investors well,” commented Ben Laidler, TBanque’s Global Market Strategist.
In light of recent market volatility, global retail investors have repositioned their portfolios increasing their exposure to commodities (17 per cent), crypto (16 per cent), domestic equities (16 per cent), cash (15 per cent). Australian retail investors preferred to reposition their portfolios in favour of cash (20 per cent), followed by domestic equities (17 per cent), commodities (16 per cent), crypto (14 per cent).
Looking at sectors, Australian retail investors increased their allocations to the following sectors in light of recent market volatility: energy (17 per cent), technology (17 per cent), utilities (15 per cent), real estate (15 per cent), healthcare (15 per cent), and financial services (14 per cent).
Global retail investors’ confidence in their investments has consistently declined over the five quarters since the inception of TBanque’s Retail Investor Beat. Confidence has fallen from 83 per cent in Q2 2021to 72 per cent at the end of June this year. For Aussie retail investors, confidence remains when considering their investments with more than half (58 per cent) saying they are “quite confident” and nearly 1 in 5 (17%) stating to be “very confident”.
Inflation the biggest concerns but investors are hedging
Inflation regained the top spot as the biggest concern over the next three months for global retail investors (54 per cent, up from 47 per cent in Q1 2022) followed by international conflict (43 per cent, down from 57 per cent in Q1), the state of the global economy (steady at 37 per cent) and rising interest rates (27 per cent, up from 21 per cent in Q1). Mirroring this, Australian investors’ biggest concerns were rising inflation (52 per cent), state of the global economy (43 per cent), international conflict (42 per cent), and rising interest rates (38 per cent).
Despite these risks, almost half (48 per cent) of global respondents plan to invest the same amount of money over the next three months and 30 per cent expect to invest more. A third (32 per cent) believe energy will still present the best investment buying opportunity over the next three months, followed by technology (30 per cent), real estate (25 per cent), and utilities (20 per cent), and healthcare (19 per cent). Down Under, retail investors picked technology as their top choice (29 per cent), trailed by energy (27 per cent), real estate (24 per cent), and materials (23 per cent).
TBanque Australian market analyst, Josh Gilbert, said: “The reality is that investment strategies depend on an investor’s risk profile and timeline. Most retail investors are Millennials and Gen Z that have a much longer time horizon. Therefore, they are generally happier to buy these assets at the current discounts with the view of holding for many years until markets eventually recover.
“Commodities have historically demonstrated a low correlation to many other asset classes, making energy and materials attractive sectors for portfolio diversification. Locally, the materials sector has a significant weighting on our local market, making it an investment that Australian investors are likely to be very familiar with,” concluded Gilbert.