Investing Insights with Tony Alexander: A steady hand in uncertain times
This month, independent economist Tony Alexander finds that despite challenges on all fronts, investors are sticking to their plan.
Each month, Tony surveys over 27,000 Kiwis to find out what they’re investing in and how they’re investing in it. He then analyses their responses and reports on how investment preferences are changing over time. This gives us a look into people’s thoughts on different shares, types of property, active vs passive fund management, whether to use an advisor or an app, which countries to invest in, and much more.
Below, we look at some of the key trends in Tony’s April survey.
Investors not put off
Investors face high levels of uncertainty including Russia’s war against Ukraine, lockdowns in China due to COVID-19, and rising interest rates and inflation at home, to name a few.
While you’d think this would encourage investors to hide under the duvet, their intentions to add to their long-term investments remain strong.
In our latest survey 74% of respondents say they are planning to add to their investments in the coming year. This is little changed from 75% in March and February. And while definitely down from September (88%), the shift is smaller than expected given the economic environment and effect on some share prices.
Shares remain the most popular asset class to buy, followed by managed funds (indirect share purchases pretty much), then residential property, and debt reduction.
Residential property under sell pressure
Shares also rank highly (easy to trade) when it comes to selling asset classes, but a disproportionately high percentage of respondents say they intend selling residential property.
This is the reverse of a recent trend that saw intentions to buy housing on the rise. Possibly lots of discussion around falling house prices has had an impact, along with less ability to deduct interest expenses against taxable income, soaring construction costs and delays, plus rising interest rates (yes again!).
Speaking of property, the intention to buy commercial buildings is on the wane. Industrial and warehousing assets are the dominant play. Office accommodation is on the up as people return to work in CBDs.
Another surprise as interest rates head north is that the intent to repay debt is not trending upward. Go figure?
Other trends include the buying of crypto assets plateauing after a dip in February. Precious metals like gold continue to be a safe haven investment, with the intent to invest in these remaining steady since November.
Aussie, Aussie, Aussie
There’s continued interest in Australian shares. And the trend to self select shares (as opposed to a fund manager or broker choosing for you).
For those investors looking at buying shares through a managed fund there is a slight upward trend to do this through KiwiSaver.
Other share investing behaviour is similar to previous months. This includes a preference for energy, health, and tech sectors.
When investing in managed funds, growth or aggressive portfolios are still the most popular. Even with some disappointing results for the year to 31 March!
Download the report
For a deeper dive, download the full Investing Insights report for April 2022 [PDF, 1.47 MB].
Investing Insights is conducted in partnership with Tony Alexander. All analysis is Tony’s and not influenced by Sharesies.
Ok, now for the legal bit
Investing involves risk. You aren’t guaranteed to make money, and you might lose the money you start with. We don’t provide personalised advice or recommendations. Any information we provide is general only and current at the time written. You should consider seeking independent legal, financial, taxation or other advice when considering whether an investment is appropriate for your objectives, financial situation or needs.