Many in retirement are travelling comfortably, with three key factors contributing to their happiness – good physical and mental health and enough money to enjoy life.
Perhaps the assumption that markets are still anchored by predictable economic policies needs to be challenged. For the first time since the fall of the Berlin Wall, political volatility – once background noise – is potentially reshaping investment risk at a structural level.
Half of Australian investors plan to scale up as confidence grows
Changing risk dynamics are improving Australian investors’ confidence and prompting them to increase their investments, as worries over pandemics and political unrest give way to more manageable anxiety over rising interest rates, according to a new survey.
And while investor confidence is not yet back to pre-COVID levels, it appears back on a recovery track after plunging in 2022 with respect to both the domestic and global economies, Chartered Accountants Australia & New Zealand (CA ANZ) said.
Half of respondents to the company’s annual Investor Confidence Survey for 2023 reported intentions to increase the scale of their investments in the next 12 months. In contrast, only 8 per cent plan to decrease their investments over the next year.
“After a rough 2022 where confidence plunged due to fears around a continuing pandemic and ongoing political unrest, this survey shows there’s a ray of light shining on both local and overseas markets,” CA ANZ reporting and assurance leader Amir Ghandar said.
The survey showed 85 per cent of respondents said they are confident investing in local publicly listed companies, while 73 per cent said they have confidence in offshore markets.
“We’re not quite back to pre-pandemic levels, but across multiple indicators, investor confidence is holding steady or lifting,” Ghandar said, attributing the improved sentiment to a change in risk.
“Fears of ongoing pandemics and global political conflict have dropped away, to be replaced by concern about rising interest rates, which in comparison is a much more contained issue,” he said. “Investors feel it’s a bit easier to plan for rising interest rates than snap lockdowns and international crises and the unknowns they bring.”
Rising interest rates now constitute the biggest risk to the domestic economy, according to investors, with 23 per cent of survey respondents citing that as their main concern, up from 13 per cent in 2022. Fears about global political unrest and pandemics each fell by 6 per cent.
“We can also see that investors are looking to invest in those trusted markets where there’s transparency and reliable, audited information,” Ghandar said.
“Confidence in Australia’s audited financial reports had remained solidly around 90 per cent throughout the four years this survey has been running, and auditors remain the most trusted intermediary when it comes to protecting investors’ interests, followed by regulators and analysts,” he added.
CA ANZ surveyed more than 1,000 Australian retail investors, mostly with more than $10,000 on the sharemarket, as well as managed funds, property and superannuation portfolios, and other investments. The annual survey examines retail investors’ feelings about capital markets, public companies, financial reporting, issues like climate change and crypto-assets, and whom they trust to protect their interests.
