What type of ASX investor are you? Survey reveals evolving strategies

Technology and the pandemic have swiftly changed the retail investing environment.

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Have you ever used Google [Alphabet Inc Class A (NASDAQ: GOOGL)] to research a promising ASX share before you invest in it?

If so, you’re far from alone.

That’s according to a new global survey released by multi-asset investment platform eToro titled eToro’s Retail Investor Beat.

The investor study surveyed 500 Aussie retail investors across all the major cities to discern their habits and trends in the second quarter of 2021. And it found that 41% of ASX retail investors turn to Google to investigate potential opportunities. That makes Google the most common tool used among Aussie retail investors.

As for social media?

The survey found that more experienced investors, those with at least 10 years’ experience, are “considerably less likely” than newbies to turn to online forums and social media to get the scoop on potential investments.

ASX shares, international shares, or cryptocurrencies?

These days its easier and cheaper than ever to invest in international shares. And cryptocurrencies continue to defy most regulatory efforts and draw in new investors and speculators.

Looking beyond opportunities on the ASX, 32% of respondents said that US shares look to be the best investment opportunity over the coming 3 months, relative to European and emerging markets.

Sector wise, technology shares remain a favourite play. 36% of Australian retail investors said the tech sector will offer the best opportunities in the quarter ahead.

Cryptocurrencies, as you may expect, are twice as popular with younger Aussie investors as with older investors. 32% of the younger cohort said they were likely to invest in crypto over the next 3 months compared to 16% of the older investors.

So which crypto are they eyeing?

Bitcoin, of course. The world’s biggest crypto by market cap. 21% of respondents forecast Bitcoin offers the best investment opportunity.

Commenting on the survey results, Robert Francis, Australian managing director of eToro said:

Thanks to the rise of the retail investor, Australians are starting to take more control of their investments and understand what their strategy and risk appetite is before taking the plunge. We are seeing more educated retail investors diversifying their portfolios with a range of different assets including their favourite stocks from markets beyond the ASX, to crypto and commodities.

Investors optimistic on share market outlook

Respondents weren’t overly bullish on the outlook for the Aussie economy. But the majority believe their investments will gain value over the coming 12 months.

84% of Aussie retail investors said they’re more confident with their own investment plans than they are with the national or global economic outlook. While 57% think their investments will appreciate over the coming year.

Younger retail investors appear even more bullish, with 40% of Generation Z and Millennials saying they plan to invest more in the next 12 months compared to 29% of Generation X and Baby Boomers.

Don’t forget the ASX dividends

Dividends came in as the leading issue for Aussie retail investors, with 35% listing a company’s dividend payment as the most important factor they consider.

Dividends are more important for older retail investors than younger. 55% of older respondents make dividends a priority check box compared to 20% of younger investors. With ASX shares often coming with franking credits, investors often get a welcome break come tax time.

The importance of environmental, social and corporate governance (ESG) compliance in their investment decisions also showed a large difference between age groups. Younger Australian retail investors were twice as likely to list concern over ESG as a concern compared to those aged 55 and older.

e-Toro’s Francis said:

These survey findings demonstrate a shift in attitudes towards the stock market that may have not existed prior to the global pandemic. In 2020, we saw a confluence of circumstances including the acceleration of digital technologies, commission-free stock investing, interest rate cuts and similar trends which well and truly pushed retail participation in the capital markets.

Francis added, “The future is looking bright for Australian retail investors and we are excited to see what types of trends the next quarter will bring.”

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Alphabet (A shares) and Alphabet (C shares). The Motley Fool Australia has recommended Alphabet (A shares) and Alphabet (C shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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