Wednesday, February 17, 2010

 

She'll be right!


It's often been said that Australia is a nation of share investors. So I guess I shouldn't be surprised that a study conducted in late 2008 - after a year of plunging share prices - found that aussies were relatively unfazed. Some 80% of participants in the study thought that it was a good time to buy or hold onto shares.

Here's the full story from Melbourne's Herald Sun:
Fewer Aussies owning shares after crisis

By Xavier La Canna June 23, 2009 4:24PM

THE proportion of Australians playing the stock market has dropped sharply due to turmoil in financial markets, but overall interest remains high by international comparisons.

The latest Australian Share Ownership study released on Tuesday showed 6.7 million people, or 41 per cent of adults, participated in the share market.

The figure was down from 46 per cent when the last study by the Australian Securities Exchange (SX) was conducted in 2006, and well off the 55 per cent peak in 2004.

But the data shows Australians continue to be among the most willing sharemarket investors in the world.

Australia is just slightly behind the US, where 45 per cent of households invest in shares, but well above other countries.

In Switzerland ownership in shares and funds was put at 21 per cent, while it was 14 per cent in Germany, and 18 per cent of households in the UK.

The drop in Australia's share ownership in the new study meant about 540,000 Australians had left the market by late 2008 compared to two years earlier.

"The decline in share ownership between 2006 and 2008 is also mirrored in declining ownership of all other key types of investments over the same period," the ASX study said.

"This suggests that volatile market conditions and a more pessimistic economic outlook have impacted on people's propensity to invest."

The study, which involved 2,400 adults and was conducted in November and December last year, divided shareowners into those who directly invested in shares, and indirect share owners who invest in an unlisted managed fund not part of a superannuation fund.

It showed that 36 per cent of those surveyed were direct investors, down from 41 per cent in 2006.

Some 40 per cent of Australian men were direct share investors compared to 30 per cent of women.

Those most likely to invest were aged 55-64 years and ownership increased in line with education and household incomes.

WA stuck out as the state with the highest direct share ownership, at 39 per cent.

Victoria and NSW followed, each with 35 per cent, ahead of Queensland (32 per cent), South Australia and Tasmania (each with 28 per cent) and the Northern Territory (18 per cent).

Of those who invested, 70 per cent were using online brokers, with that proportion rising substantially.

The study, which is the 11th in a series dating back to 1991, also found investors are developing transaction-based relationships with brokers, suggesting a greater self-reliance about financial decision-making.

The most likely source of information for direct share investors was newspapers, which 50 per cent used, up from 42 per cent two years ago.

The internet was also a rising source of company information, with 41 per cent using the web for advice and information, up from 30 per cent in 2006.

Despite the market turmoil in recent years, 43 per cent of those who participated in the study thought 2008 was a good time to buy shares, with another 37 per cent saying it was a good time to hold onto shares.

Just 15 per cent said it was a good time to stay out of the market and none said it was a good time to sell shares.

And for the first time, the study measured the attitude and behaviour of lapsed investors.

It found 15 per cent of all Australian adults used to own shares or listed investments but no longer do so.

But almost half of those lapsed investors were keen to return to the market at some stage.

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