A new survey has found that 68 per cent of local retail investors held onto their investments during the recent stock market sell-offs and a further 25 per cent chose to buy the dip.
Only 7 per cent of the Aussie investors surveyed by eToro elected to sell during the period of heightened volatility and fear, with similar trends also seen across retail investors worldwide.
“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,” said eToro global market strategist, Ben Laidler.
“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.”
According to the survey, rising inflation was ranked as the biggest concern for investors both in Australia (52 per cent) and globally (54 per cent).
Global inflation concerns were up from 47 per cent in Q1, while the proportion of investors worried about international conflict dipped from 57 per cent to 43 per cent.
Locally, retail investors pointed to the state of the global economy (43 per cent), international conflict (42 per cent) and rising interest rates (38 per cent) as among their top concerns.
Aussie investors increased their allocations to a number of sectors in light of the recent volatility including 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).
Retail investors in Australia also reported repositioning their portfolios in favour of cash (20 per cent), domestic equities (17 per cent), commodities (16 per cent) and crypto (14 per cent).
On their investing plans for the next three months, 48 per cent of global investors said they would invest the same amount of money and 30 per cent expected to invest more.
Technology was highlighted as the best buying opportunity by Aussie investors (29 per cent), followed by energy (27 per cent), real estate (24 per cent) and materials (23 per cent).
“Commodities have historically demonstrated a low correlation to many other asset classes, making energy and materials attractive sectors for portfolio diversification,” said Mr Laidler.
“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.”
eToro also noted that the confidence of investors has continued to decline every quarter since its Retail Investor Beat survey was introduced last year, with a drop from 83 per cent in Q2 2021 to 72 per cent at the end of last month.
In Australia, 58 per cent of retail investors indicated that they were ‘quite confident’ in their investments while 17 per cent stated they were ‘very confident’.
Jon Bragg
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.
