Investing Insights with Tony Alexander: Cautious optimism
In the second of our monthly series, independent economist Tony Alexander finds investor confidence continues to wane, but there are still bright spots.
Each month, Tony surveys over 25,000 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.
The findings give you 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 February survey (sent 15 February 2022).
Investors anticipate rising interest rates
The proportion of survey respondents planning to boost their investments is still high at 75%. However, the trend is continuing downward when we compare this to 88% in September 2021.
A big influence is rising interest rates. People are becoming more cautious about what their returns will be. This includes assets that are fixed for longer than a short-term.
We ask people which assets they plan to buy more of, and what they plan to sell some of. Nearly half (49%) say they plan to buy more shares, 27% residential property, and 14% commercial property.
But when it comes to selling, just 10% of people say they’ll sell some shares, whereas 16% plan to sell residential property.
When we offset the buying and the selling, we see that investing in shares, managed funds, and exchange-traded funds (ETFs) are the most popular. And there’s also an appetite to pay off some debt.
Crypto coming off the boil
The intention to buy crypto also continues to trend down across all age groups. This is likely due to some extreme volatility in prices for the likes of Bitcoin, and some investors anticipating a price impact when interest rates do start rising in the US. There’s also less interest in non-fungible tokens (NFTs).
A net 27% of investors aged under 30 years plan to buy more crypto assets over the coming year, compared with 13% of those aged 30-50, 6% of those aged 51-65, and just 2% of those aged over 65.
Share buying trends
A high 41% of people looking to buy shares directly in companies (rather than managed funds or ETFs), plan to do this using an app, while 27% would use a broker.
There’s no change from Tony’s January survey in the sectors investors prefer. Energy, health, and tech still feature.
The types of fund people prefer has changed little, at 22% for aggressive, 43-44% for growth, and 2-3% for conservative.
As yet there is no shift in the countries people choose to invest in. In February 37% favour New Zealand, 25% the US, 29% Australia, and 5% the UK.
Download the report
For a deeper dive, download the full Investing Insights report for February 2022 [PDF, 1.82 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.