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For the first-time investor, the share market can be daunting. But with savings interest rates dwindling in line with a record-low cash rate, more Aussies are turning to shares to boost their returns.
With 2 in 3 Australian adults (67%), equivalent to more than 13 million people, saying they would or are currently investing, Finder took a deeper look into which Aussies are doing so and why.
We surveyed a nationally representative 1,007 Australians in July 2020 and compared it to 1,047 Australians in November 2019 to get an understanding of the reasons they have or would invest in a company's stocks or shares.
Response | Proportion of Aussies |
---|---|
It delivers a good return on investment | 41% |
Build up my retirement fund | 26% |
A company was/is consistently growing | 24% |
Savings interest rates are poor | 22% |
A company's share price was/is dropping so I wanted to invest while it was cheaper | 19% |
Investing is more accessible now through apps | 17% |
I like the product(s) that the company sells | 14% |
A financial planner suggested/suggesting it | 14% |
A friend/family member told/telling me it was a good investment | 12% |
The company has been in the news | 4% |
I like the owner/CEO | 4% |
Other | 1% |
Our survey shows that Gen Z (those aged 25 and younger) tend to find investing the least intimidating and are more likely to give stocks a go than other generations, followed closely by Gen Y (those aged 26-40).
Here is a breakdown of the percentage of each generation that would consider investing in stocks and shares.
Generation | Plan on investing |
---|---|
Baby boomers | 50% |
Gen X | 64% |
Gen Y | 79% |
Gen Z | 81% |
Gen Z | Gen Y | Gen X | Baby Boomers | |
---|---|---|---|---|
It delivers a good return on investment | 46% | 45% | 45% | 30% |
A company was/is consistently growing | 29% | 29% | 22% | 18% |
Build up my retirement fund | 25% | 27% | 31% | 19% |
I like the product(s) that the company sells | 20% | 18% | 11% | 11% |
A friend/family member told/telling me it was a good investment | 21% | 16% | 9% | 7% |
A financial planner suggested/suggesting it | 24% | 14% | 12% | 10% |
Savings interest rates are poor | 22% | 29% | 19% | 18% |
Investing is more accessible now through apps | 27% | 28% | 10% | 4% |
A company's share price was/is dropping so I wanted to invest while it was cheaper | 33% | 23% | 15% | 10% |
I like the owner/CEO | 8% | 4% | 4% | 1% |
The company has been in the news | 6% | 6% | 3% | 1% |
Other (Please Specify) | 0% | 1% | 4% |
Not surprisingly, ROI (return on investment) or plainly, making money, was the number one reason that all generations invest. Less predictable were the secondary reasons that draw the different age groups to the market.
There's a bit of a gender gap when it comes to investing, with women being less keen than men to try it out. We asked Aussies about investing in shares and 74% of men said they would consider it, but only 62% of women said they'd be keen.
Would consider investing in shares | Would not invest in shares | |
---|---|---|
Women | 62% | 38% |
Men | 38% | 26% |
Men are more likely to invest than women in every generation, but the divide is lessening with each passing generation.
From Baby Boomers to Gen Z the divide has narrowed from 13% to 8%.
And the gap is even more pronounced when you look at how many more Aussies are considering investing now versus November 2019. With the exception of Aussie Gen Y women, every generation and gender says they are more likely to consider investing now versus 2019.
Anonymised insights from the Finder app – which tracks user spending, hunts down savings and sends alerts – found a spike in share trading in August 2020 compared to July 2020, and an overall increase when compared to a year ago:
Want to get more out of your online share trading? Keep the following tips in mind when buying shares online: