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Are Aussies swapping properties for shares?

By sreporter
01 June 2020 — 1 minute read

Australian investors are looking to cash in on the COVID-19 pandemic, believing now is a good time to enter the sharemarket over property, according to a financial institution.

Results released by Switzer Financial’s “Fear, greed and hope” survey revealed sentiment around Australian equities, with over 60 per cent stating now is a good time to buy shares.

“I suspect the combination of online trading and the escalation of financial education, especially around stock market trading, have created a smarter group of retail investors who might have ‘eaten the lunch’ of the smarties who run funds,” said Peter Switzer, director of Switzer Financial Group.

Not only are Aussies looking at equities, they are favouring them over other assets, with 62.8 per cent of respondents noting they would prefer to invest in stocks over property, term deposits and other investments.

This could be due to Australians becoming more confident in the stock market as the market releases better than expected economic data

In February, nearly 40 per cent of investors said the stock market crash would happen in 2021. Now, 40.7 per cent think the stock market will crash in 2025 or later.

“This shouldn’t really be surprising as both these companies are world-class and serious export-income earners. But it indicates that so-called ‘mums and dads’ (or retail) investors are becoming more sophisticated analysts of the sharemarket,” Mr Switzer said.

When addressing specific stocks, respondents predominantly aligned with CSL and Macquarie Group in both surveys conducted in February and May. The COVID-19 pandemic has not changed their faith in Australian blue chips.

Despite believing in ASX 200 companies, nearly 20 per cent of respondents are looking to be more aggressive since COVID-19 hit the stock exchange.

According to the results, 39.8 per cent of respondents have not changed their investing strategy due to COVID-19. Meanwhile, 38.7 per cent have become more conservative investors and 21.5 per cent have become more aggressive, the report found.

“This great move up for stocks out of the bear market is a welcome trend that tells us that there’s an expectation that our economic future is looking miles better today than it did one, two and six weeks ago,” Mr Switzer concluded.

nestegg has previously reported on the same investors’ perception of the Australian property market.


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