Millennial investors stick to guns in worst market falls since COVID
Despite Australia’s worst market downturn since March 2020, well over half of investors on Australia’s leading long-term investing and wealth management platform, Pearler, remain undeterred in their investment strategy, pointing to a shift in long-term investment thinking and a growing focus on financial freedom.
Pearler’s latest annual investment insights research showed that 61.4% of its users believe that the current market volatility has not affected their investment strategy, with a further 31.2% of investors’ strategies only ‘somewhat affected’.
Co-Founder of Pearler, Nick Nicolaides, said, “Pearler promotes a long-term mindset in a market dominated by gamified trading. Savings rate, portfolio concentration, and how much time our investors are spending looking at the investment app – these are all signals of how healthy their relationship is with money, which we see as a major factor in the road to financial freedom.
“Our latest research shows that even though this market volatility may have forced speculative investors to sell-out or stop investing, our users, who are predominantly young people and over half women, are sticking to their long-term investment strategy. And this is an excellent sign,” he said.
The investor demographic of the 1,946 survey respondents was made up of 51% women, with 66% under 35 years of age.
Key results of the survey show:
- Reflecting their long-term thinking, 92% plan to hold their investments for 5 or more years, and 40% for more than 20 years.
- The data challenges millennial stereotypes of poor financial skills and a lack of frugality with money; 13% of those polled earned less than $45k and still found a way to invest, and 44% owned property while still investing on the side.
- 80% engaged in investing activities at least once a week, and 88% read blogs or investment related books, listen to podcasts to help make decisions, implying a highly engaged and disciplined young investor base.
- Over half investors made their first investment in the last year, 55%, and almost 80% invest more every month.
“We collected this data during the worst week of the current market downturn. Our community is down 12.93% over FY22, which we’re happy to disclose as we want our investors comfortable talking about the downside and learning from one another, and they’re not concerned,” said Nicolaides.
“The wealth industry hasn’t adapted fast enough to younger generations’ appetite to self-educate, there is still with too much jargon, restrictive media paywalls and prohibitive costs for advice. So, the younger generations are learning from one another by sharing amongst friends, colleagues, and online communities.”
This survey is part of the Pearler Year in Review feature, allowing its investors to review and share their financial data to encourage self-reflection, accountability, but also to make investing more fun.
“The Pearler Year in Review is kind of a play on Spotify’s ‘Wrapped’ campaigns that fill our social feeds each December. We give investors some fun, and maybe a little nerdy, visuals of how they’ve been growing wealth over the last Financial Year,” said Nicolaides.
“When markets are volatile, people naturally will care more about daily ups and downs. What we try to do is refocus that energy on how far you’ve come personally and the strength of your portfolio, rather than an arbitrary calculation of share prices.
“In this climate our goal is to minimise the risk of panic selling or trying to pick the bottom, which in the long-term has shown to hurt returns more than help them,” he said.
