Markets are volatile, so what are investors buying (and selling)?

Most Australians stick to their long-term investment strategies despite financial market volatility. (Source: Getty)

Soaring inflation, interest rate hikes, supply chain issues and geopolitical unrest may drive across the globe, but few Australian retail investors are panicking.

Brendan Doggett, country manager of Sharesies Australia, said he saw very little panic on the micro-investment platform.

He attributed this to how knowledgeable retail investors had become over the years.

“So people are still sticking to their long-term strategies,” Doggett said.

In this volatile time, he said investors are looking close to home and putting money into familiar businesses.

June's Best Buys

June’s Best Buys

People were also getting ready for the sales.

Doggett said trading activity has declined over the past few weeks despite the significant increase in deposits on the platform.

“So it feels like people are getting ready,” he said.

“They’ve seen what’s happening and potentially think we’ve bottomed out and they’re ready to start investing again.”

He said people were looking for bargains. He said banks, such as Westpac, were on investor watch lists.

Mining companies were also top buys and Qantas was among the top 10 buys.

Doggett said this was likely due to the “revenge travel” trend of people returning to the skies in droves after being unable to travel during COVID.

The platform also saw increased activity in exchange-traded funds (ETFs), indicating that investors were looking to diversify their holdings.

“ETFs have been so popular over the past two years, and we’ve seen even more activity in ETFs when the market is down or going sideways,” Doggett said.


Source: Sharesies

The top three ETFs to buy were all Vanguard: Vanguard Australian Shares Index, Vanguard S&P 500 ETF and Vanguard MSCI Index International Shares.

“So if you’re investing in all three, you’ve pretty much diversified your investments globally,” Doggett said.

While niche ETFs haven’t always seen this much trading volume, Doggett said the .

Doggett said the change in government meant clean energy and other sustainable industries were likely to get more support, which attracted investment.

Australian retail investors remain firm

Recent data from eToro revealed that only 7% of Australian retail investors had sold investments during the recent stock market sell-offs.

According to a survey of 10,000 retail investors in 14 countries, as many as 92% either held their investments or were buying the dip.

About 64% of the 1,000 Australian investors surveyed maintained their positions and a further 28% bought the dip.

“Despite a deluge of setbacks in global financial markets, retail investors in Australia and around the world have found the strength to look beyond short-term volatility and use these price declines to bolster their long-term portfolios. term,” Ben Laidler, eToro’s global market strategist, said.

“With bull markets ultimately building on the shoulders of bear markets and nearly four times the duration and magnitude, staying the course and repositioning their portfolios should serve these investors well.”

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