Optimistic Aussie investors targeting 10% annual gains
As investors battle market volatility, Fidelity International’s research shows Australian investors are more confident than their APAC peers in reaching their financial goals.
A survey of over 6,500 individuals across Asia Pacific revealed widely varying levels of confidence in their ability to achieve financial goals, with Australia coming in as the most confident (79 per cent), while Japan recorded the lowest with just 29 per cent, falling considerably below the APAC region average of 53 per cent.
Notably, this high confidence among Australians is also reflected in their annual return expectations, with Aussies expecting an annual return of 10.1 per cent compared to 8.1 for APAC on average.
However, despite these lofty return expectations, over half (57 per cent) of Australian respondents said they have increased their cash savings and 47 per cent are putting excess cash into their superannuation.
Looking at what Australians prioritise most, 52 per cent said saving for retirement is their top long-term goal, followed by financial independence (50 per cent).
Despite this abundance of confidence in their long-term goals, Australian investors still struggle to adopt a long-term view, with 59 per cent having an investment horizon of less than three years, and just over a quarter (27 per cent) focusing beyond five years into the future.
Commenting on the findings, Fidelity Australia managing director Simon Glazier said: “The study indicates that investors in Australia demonstrate the highest confidence levels in the APAC region and maintain a strong sense of optimism regarding their long-term prospects and ability to achieve financial objectives.
“Although there has been an increased allocation to cash savings this year, investors here continue to expect annual returns of 10.1 per cent – the region’s highest projection. However, holding excess cash may not provide the anticipated results.”
The study also questioned how Australian investors would react to market swings, with the findings showing a leaning towards buying when markets rise.
Some 57 per cent said they would keep their investments unchanged if they were hit with a 10 per cent decrease in a single day, compared to an average of 62 per cent across the APAC region. On the other hand, if a 10 per cent single-day increase were to occur, 54 per cent of Australians said they would leave their investments as is – compared to 57 per cent for the APAC region.
“Compared to the APAC region, Australian investors are more inclined to buy more units when markets rise (21 per cent versus 12 per cent), and least likely to sell (21 per cent versus 31 per cent). This indicates a regional difference in risk tolerance,” the report stated.
AUTHOR
Shy-Ann Arkinstall
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