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Investing Insights with Tony Alexander: Resilience

Investing Insights

This month, independent economist Tony Alexander finds investors are focusing on building long-term wealth, in spite of a worsening global outlook.

  • Tony Alexander

    Independent economist

The cover image features the word May in big pink text in the middle of a dark green background. On the top right is an inset circular photo of a hydro plant, below the word May is an inset circular photo of a row of houses, and on the top left is a circular photo of Tony Alexander. In between these are pink line-drawn percentage symbols, a line-drawn globe, and the year 2022.

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 May 2022 survey. 

Investors dig deep

You’d expect people to pull back from investing and sit on cash given significant falls in major offshore share indices and deepening worries about the world economy, supply chains, cost of living, and Russia’s continuing war on Ukraine.

But results from this month's survey show the pull-back to be extremely small. In May, 73% of our survey respondents said that they plan to add to their portfolios. This is down from 74% in April, and 75% in March and February

It seems investment portfolios mainly have a long-term focus, which challenges the view that Kiwis have only short planning time horizons.

Shares win over property 

When asked what people plan to buy, shares (as always) are the number one choice, followed by managed funds and residential property. 

But intentions to buy residential investment property continue to edge back after rising through to the end of March—as do intentions to invest in commercial property. 

This month, we also see net intentions to buy crypto assets slowly decline. 

A pink bar graph showing net intentions of purchasing crypto assets falling from a peak of 16% in November 2021, to a low of just under 8% in May 2022.

Rising interest rates yet to bite 

There's still no solid evidence that rising interest rates are leading investors to reduce their debt levels. This may reflect the fact that interest rate levels are not as high (yet) compared with the past.  

Again, evidence of a longer-term horizon can be seen through a continuing upward trend to buy shares through KiwiSaver rather than a non-KiwiSaver managed fund. 

However, there is a small decrease in managed fund investors with a riskier profile. That said, weakening share prices are not leading to a shift towards conservative funds. 

Energy and resource stocks in favour

Undoubtedly, the global hike in energy prices and accelerating development in the green energy sector is behind a growing interest in buying shares in the energy sector.

A pink bar graph showing the percentage of all share buyers that will buy energy sector shares. The percentage has risen steadily, from 14% in October 2021 to just under 16% in May 2022.

As well as rising interest to buy shares in the resources sector. 

A pink bar graph showing the percentage of all share buyers that will buy resource sector shares. The percentage has risen consistently, from just over 4% in November 2021 to over 7% in May 2022.
A hand is holding a printed copy of May 2022's edition of Investing Insights with Tony Alexander against a pink wall, with a shadow of the hand and report being cast to the left.

Download the report

For a deeper dive, download the full Investing Insights report for May 2022 [PDF, 1.49 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.

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