Young, cautious investors on the rise

Melissa Jenkins
(Australian Associated Press)

 

New share market research has turned on its head the assumption young people are more comfortable with risk than their older counterparts.

Double the proportion of young Australians are dabbling in shares or other investments outside of superannuation than five years ago, the ASX Australian Investor Study 2017, conducted by Deloitte, has found.

The proportion of 18 to 24 year-olds investing is 20 per cent, up from 10 per cent in 2012, according to the survey of around 4,000 people.

Investors aged 25 to 34 grew from 24 per cent to 39 per cent over the same period.

Young investors were twice as likely to be risk-averse than their older counterparts, with 81 per cent of investors under 35 seeking guaranteed or stable returns.

Some 41 per cent of investors aged over 55 were comfortable with variable returns.

“Retirement and wealth accumulation are front of mind for all age groups, and individuals are investing in products that reflect these goals,” the report reads.

“However, investing can be a path to achieving other life outcomes.

“Younger investors may be increasingly considering investing as a way to save for their home deposit.”

Only 45 per cent of investors use financial advice, with the rest relying on their own research and advice from sources like family and friends, accountants and lawyers.

The study also found most investors stick with shares and around 40 per cent reported they do not have a diversified portfolio.

“While most investors feel comfortable with shares, cash, and property, diversification remains an issue impacting overall risk,” the report reads.

“This may be constraining investors’ ability to best match their investment behaviours to their financial goals.”

The report identified self-managed super funds as a potential growth area, with almost one third of respondents who do not have one planning to set one up in the future.

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