Australian retail investors expect local stocks will close 2019 at virtually the same level as current prices which means these expectations are well below the levels from the end of 2017, where investors expected capital gains of +4.8 per cent for calendar year 2018, according to an Investment Trends’ report.
The “December 2018 Investor Intentions Index” study also revealed that the expectations were being dragged down by investors’ mounting concerns with the current state of the world’s financial markets, but Investment Trends suggested financial advisers could help clients better understand and navigate the situation.
When asked what they were most concerned about, tension between the world’s major economies was top of mind (cited by 55 per cent), followed by the current White House administration (53 per cent) and a slowdown in China’s economy (41 per cent).
From a domestic perspective, 30 per cent were worried about property prices, on par with concerns of share market volatility, the report found.
Recep Peker, Research Director at Investment Trends, said that the last few months additionally saw investors take an increasingly global perspective when considering what factors may affect their portfolio.
“Where some are fearful, others see opportunity, with nearly a quarter expecting strong returns from domestic equities in 2019. Financial services firms and advisers can help retail investors better understand the current climate in order to make more informed decisions,” he said.
“Q4 2018 stands out as investors’ most bearish quarter since the GFC, with the average investor closing the year expecting no capital gains from domestic shares in 2019.
“Despite this, they still believe in the income potential of Aussie shares, expecting a yield of 4.1 per cent over the next 12 months.”