Latest News

Hot Issues
spacer
Aged care report goes to the heart of Australia’s tax debate
spacer
Removed super no longer protected from creditors: court
spacer
ATO investigating 16.5k SMSFs over valuation compliance
spacer
The 2025 Financial Year Tax & Super Changes You Need to Know!
spacer
Investment and economic outlook, March 2024
spacer
The compounding benefits from reinvesting dividends
spacer
Three things to consider when switching your super
spacer
Oldest Buildings in the World.
spacer
Illegal access nets $637 million
spacer
Trustee decisions are at their own discretion: expert
spacer
Regular reviews and safekeeping of documents vital: expert
spacer
Latest stats back up research into SMSF longevity and returns: educator
spacer
Investment and economic outlook, February 2024
spacer
Planning financially for a career break
spacer
Could your SMSF do with more diversification?
spacer
Countries producing the most solar power by gigawatt hours
spacer
Labor tweaks stage 3 tax cuts to make room for ‘middle Australia’
spacer
Quarterly reporting regime means communication now paramount: expert
spacer
Plan now to take advantage of 5-year carry forward rule: expert
spacer
Why investors are firmly focused on interest rates
spacer
Super literacy low for cash-strapped
spacer
Four timeless principles for investing success
spacer
Investment and economic outlook, January 2024
spacer
Wheat Production by Country
spacer
Time to start planning for stage 3 tax cuts: technical manager
spacer
Millions of Australians lose by leaving savings in default MySuper funds
spacer
Vanguard economic and market outlook for 2024: A return to sound money
spacer
An investment year of ups and downs
spacer
How to tame the market's skewness
spacer
The Countries that Export the Most Wine in the World
spacer
Tips for preparing for the best tax outcomes
Article archive
spacer
Quarter 4 October - December 2023
spacer
Quarter 3 July - September 2023
spacer
Quarter 2 April - June 2023
spacer
Quarter 1 January - March 2023
spacer
Quarter 4 October - December 2022
spacer
Quarter 3 July - September 2022
spacer
Quarter 2 April - June 2022
spacer
Quarter 1 January - March 2022
spacer
Quarter 4 October - December 2021
spacer
Quarter 3 July - September 2021
spacer
Quarter 2 April - June 2021
spacer
Quarter 1 January - March 2021
spacer
Quarter 4 October - December 2020
spacer
Quarter 3 July - September 2020
spacer
Quarter 2 April - June 2020
spacer
Quarter 1 January - March 2020
spacer
Quarter 4 October - December 2019
spacer
Quarter 3 July - September 2019
spacer
Quarter 2 April - June 2019
spacer
Quarter 1 January - March 2019
spacer
Quarter 4 October - December 2018
spacer
Quarter 3 July - September 2018
spacer
Quarter 2 April - June 2018
spacer
Quarter 1 January - March 2018
spacer
Quarter 4 October - December 2017
spacer
Quarter 3 July - September 2017
spacer
Quarter 2 April - June 2017
spacer
Quarter 1 January - March 2017
spacer
Quarter 4 October - December 2016
spacer
Quarter 3 July - September 2016
spacer
Quarter 2 April - June 2016
spacer
Quarter 1 January - March 2016
spacer
Quarter 4 October - December 2015
spacer
Quarter 3 July - September 2015
spacer
Quarter 2 April - June 2015
spacer
Quarter 1 January - March 2015
spacer
Quarter 4 October - December 2014
Quarter 4 of, 2017 archive
spacer
For the young it a question of engagement
spacer
Address Under-insurance at Personal Finance Level - Global study
spacer
Realism vs reality - working part-time as retirees
spacer
SMSFs warned on ‘ticking time bomb’ with outdated deeds
spacer
Statutory wills are underutilised in estate planning
spacer
Resources on our site to help you, your family and your friends.
spacer
Calls to Review ASIC's Definition of Lapse Insurance
spacer
Paperwork bungles lead to $38k in payments
spacer
Self-employed? Don't miss out on super
spacer
Australian Dietary Guidelines and healthy eating chart (PDF)
spacer
Big concessions looking likely for transfer balance limit: ATO
spacer
Raft of superannuation measures enter Parliament
spacer
US Fed policy: Normalisation begins
spacer
What the gig economy may mean for your super
spacer
Powerful Budgeting, cash flow and Super Tools available on our site.
spacer
Australia's leading causes of death - ABS
spacer
Government introduces first home scheme laws
spacer
Are young investors wasting their youth?
spacer
ATO granted super enforcement powers
spacer
The great Australian (retiree) dream
Are young investors wasting their youth?

It was George Bernard Shaw who coined the phrase 'youth is wasted on the young'. In Australia today, it seems the young may be wasting their investing youth.

       

 

The great advantage the young - and here we are referring to 18-25 year olds - have over those of us closer to retirement is time.

Time is a powerful investment tool because it gives you the ability to take a long-term view and ride through the inevitable market ups and downs.

Serious market downturns like the 2008 global financial crisis look completely different if viewed through the eyes of a 25-year old versus a 65-year old.

Investment experience suggests the GFC was a buying opportunity for the young and - depending on their asset allocation - a distressing lifestyle changing event for the recently retired.

Which makes the results of the 2017 ASX Australian Investor Study noteworthy. The survey of 4000 investors by Deloitte found that younger Australian investors were highly conservative in their attitude to investment risk.

The ASX survey found that around 31 percent of younger people wanted guaranteed returns and only 19 per cent would accept variability in returns. In contrast only 8 per cent of those surveyed aged over 75 look for guaranteed returns and 35 percent would accept variability in returns.

Interestingly, Australians are more conservative than investors in other countries according a global study of investor risk tolerance done by fund manager Legg Mason in 2015 that found only 29 percent of Australian investors would be prepared to increase their risk profile for the opportunity to gain extra income. Globally 66 percent of investors said they would be prepared to increase risk for the chance of higher yield.

Investing is essentially about getting the risk and return balance right and a key determinant is an investor's age.

For younger investors their relative youth is an asset that it seems many - paradoxically perhaps given risk-taking behavior more typical of 18-25 year olds - are undervaluing. Although a younger investor might feel more comfortable investing more conservatively, what they may not be considering is the opportunities for growth they are passing up in favour of short-term stability.

Another interesting stat from the survey was that only 37 per cent of young investors used financial advice to help them make investment decisions, compared to 45 per cent for all investors.

Although many investors perceived that going to an adviser was too expensive or perhaps weren't sure of their value proposition, a good financial adviser who can help an investor determine an appropriate level of risk based on their goals and time horizon, and then help them maintain the discipline and focus to stick to their plan through market ups and downs, could be one of the most valuable investments of all.

 

Written by Robin Bowerman
Head of Market Strategy and Communications at Vanguard.
05 September 2017
vanguardinvestments.com.au

Site by Plannerweb