Market too risky for high risk investors
High risk investors have lost their appetite for new products and shares, with market uncertainty persuading them to err on the side of caution, research from CoreData shows.
The first quarter of 2014 looks quiet for the typically highly active investors, who have responded to weaker growth expectations by downgrading their activity, according to CoreData’s Q1 2014 Australian Investor Report .
More than half (53.3 per cent) of the high risk investors said they expected growth to slow over the quarter, compared to 61.2 per cent of conservative investors.
The trend is in stark contrast to this time last year, when activity and expectations from high risk investors was higher than average.
High risk investors also signalled a move away from cash allocation, with one in five looking to rebalance away from cash, next to 7.8 per cent of conservative investors.
Most investors (77.8 per cent) were unhappy with the returns from cash, which CoreData says is predictable given the low interest rate environment.
However, three in five still intend to keep some of their assets in cash, while one in 10 intend to increase their cash allocation.
But CoreData Principal Andrew Inwood said the persevering interest in cash is not entirely unsurprising.
“It’s easy to see why cash is attractive for investors, especially those in retirement, given there is low volatility, so the chance of capital loss is non-existent,” he said.
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