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Australia passes 1 million active investors
The number of active Australian investors has surpassed the 1 million mark for the first time in Australia’s history, new research has revealed.
Australia passes 1 million active investors
The number of active Australian investors has surpassed the 1 million mark for the first time in Australia’s history, new research has revealed.
Investment Trends research found that as the market became more volatile during the COVID-19 outbreak, Australian retail investors grew by 41 per cent from 750,000 to 1.06 million.
According to Investment Trends research director Recep Peker, the increase in online active traders was primarily down to first-time investors entering a volatile market.
“Australia is now home to over 1 million active online investors who have traded listed investment in the past year, driven largely by a record inflow of 265,000 first-time investors,” Mr Peker said.
The research found that younger Australians are now looking for ways to set up their financial futures.
“First-time investors typically consist of young Australians in the Zoomer or Millennial age group, but the pandemic-induced lockdown has accelerated these trends. This year, the vast majority of first-time investors are under the age of 40 (70 per cent), which represents a significant shift from last year (51 per cent),” Mr Peker said.
“Falling markets provided buying opportunities presented by the market sell-off earlier this year, while the ability to start investing with small amounts was also a catalyst for many.
“But as the demographics of the industry evolves, there is now great responsibility on online brokers, product manufacturers and thought leaders to help investors navigate this uncertain investing climate.”
Surge in traders on ASIC watchlist
The corporate watchdog has advised investors against day trading, as novice investors try to cash in on changing market conditions.
During ASIC’s focus period: for more two-thirds of the days on which retail investors were net buyers, their share prices declined over the next day. If all retail investors held their positions for only one day, total losses would have amounted to over $230 million.
Stockspot instead advises investors to top up their investment portfolio on a monthly basis and do nothing else.
“As opposed to only buying when markets were down, this group invested regardless of whether the market was up or down.This strategy of constantly topping up, as opposed to trading in and out, allowed them to take advantage of lower prices at the start of the year and outperform the average investor,” the company said.
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