New Zealand online investing platforms transform attitudes to investing: research

WELLINGTON, August 5 — Eight out of 10 New Zealand investors have a more favorable view of investing and financial markets after using online investing platforms, according to a research released Thursday by the Financial Markets Authority (FMA), a government agency responsible for regulation of financial markets in New Zealand.
FMA Chief Executive Rob Everett said the regulator commissioned the research to better understand the behaviors and intentions of the large number of new investors who had started investing over the past couple of years.
“These online platforms have made it easier for people to access the markets and learn about investing – 34 percent of investors said they now have a better understanding of markets after using the platforms,” said Everett.
Kantar Public conducted the research of almost 2,000 people using online investing platforms in June this year.
“We’re encouraged to see that most investors have good intentions around how they should invest, with around 80 percent buying shares or other investments and holding them for the long term,” said Everett.
“Day trading is in the minority with just 2 percent of investors buying and selling multiple times a day.”
“But, while they have good intentions, FOMO (fear of missing out) is still a driver. Almost one-third of investors said they’d jumped into an investment in the last two years because they didn’t want to miss out.”
“And, 14 percent of investors are looking for a ‘moon shot”, indicating they are okay with risking a lot of money if there is a big reward,” Everett said.
The research showed that investing has become “social,” with new investors more likely to be influenced by online forums and an emotional connection with a company’s brand than their financial reports and disclosures.
On average, investors consulted 4.7 sources of information before making an investment decision, but this was often to confirm their own hunch. A total 27 percent of investors said they had invested based on a recommendation from someone they knew without doing their own research.
Everett said the research indicated that most investors had a strategy and planned to stick with it over the next 12 months by continuing to invest in shares or ETFs (Exchange Traded Funds).
“That said, 6 percent of investors said they intend to invest in cryptocurrency in the next 12 months, lifting the proportion of surveyed investors with an investment in cryptocurrency to 34 percent.”
“A further 4 percent of investors are considering investing in derivatives. While small in numbers, the risk in derivatives is considerable so we’ll be keeping an eye on this.”
The FMA will use the research to help prioritize future activities and messages to reach new investors.
“It’s great to see such enthusiasm from new investors – they’ve had a great run and seen their investments grow on the back of a big market rally,” said Everett.
“The big challenge is to ensure they are well equipped to make good decisions when markets head the other way.” (Xinhua)