Young investors defy the downturn and invest big

Research conducted by online comparison site, Finder, has found Generation Z investors were the most likely to invest boldly, despite the current market conditions increasing the hesitancy of others towards investing.

A survey of 1,001 people, of which 387 were investors, found 57 per cent of investors had not changed their investing strategy, 36 per cent were investing more cautiously and seven per cent were investing more adventurously than they were six months ago – equivalent to just over 500,000 people.

The research findings also showed the younger generations were most likely to see low prices as a buying opportunity, with 13 per cent of Generation Z and 10 per cent of Millennials buying the dip.

However, 50 per cent of Generation Z respondents and 37 per cent of Millennial respondents also said they were investing more cautiously, compared to 73 per cent of Baby Boomers and 59 per cent of Generation X who said they had not changed their investing strategy.

“Investing in shares during a market downturn can be daunting, especially for people with more aggressive portfolios or who have high-growth super funds,” Kylie Purcell, share trading analyst from Finder, said.

“For many young investors in particular, this may be their first experience of a market downturn.”

The survey also found male investors (8 per cent) were more likely than their female counterparts (6 per cent) to escalate their investing strategy now than six months ago.

Finders’ Consumer Sentiment Tracker also revealed the average investor had fed approximately $39,500 into the stock market.

“Warren Buffet said that it is wise for investors to be ‘fearful when others are greedy, and greedy when others are fearful’,” Purcell said.

“We saw similar movements during the 2020 market crash, when trade volumes soared well above average.

“In this case, the correction is much slower, so people are likely more cautious about taking action. With interest rates continuing to climb, it’s unclear when the market will bottom.”