Share Trading in 2021: Why we’re investing and where
The country has endured a financial rollercoaster lately, with massive job losses and the first recession in almost 30 years. But rather than see this as a reason to reign in spending, many Aussies chose to take the opportunity to build their financial future through share trading.
One platform that noticed this uptick was social media network TradingView, which reported a 340% year-on-year growth and new users jumping from 30k in 2019 to 101k in 2020.
Separate research from Investment Trends also shows that it’s younger Aussies who are shaking up the investment market: of Aussies who placed their first trade in the last 12 months, one in six were under the age of 25.
Share trading has traditionally been a grey area for Aussies of all ages, which could be chalked up to a lack of education or little talk about it in the media. But with the rising number of younger Aussies now taking an interest in the investment world, share trading might be about to become the next big thing.
What are Aussie investors buying on the share market?
According to the ASX, Australian Google searches for ‘How to buy shares’ hit an all-time high in March 2020, which was around the time the nation went into lockdown. And judging by the increase in purchase volume across three specific share types, it looks like those searching successfully found their answer.
The ASX recorded that during 2020 Aussie investors under 40 chose to purchase tech stocks, so much so that its volume nearly tripled between February and March 2020. Some popular shares of choice have been Buy Now Pay Later giants, Afterpay and Zip as well as Kogan.com.
Other popular shares were ‘blue-chip’, these are shares from leading companies that are considered to be a strong name in the industry they are in, with their products and services usually dominating their respective market. CSL Limited was one popular choice, which might be due to their collaboration with the University of Queensland back in September 2020 to develop a Covid-19 vaccine.
Notably, exchange-traded funds (ETFs) were the third most popular investment choice amongst younger Aussies, as these allow investors to diversify their portfolio. Under 40s more than doubled their buying of ETFs during March 2020.
Like, share and subscribe - where investors are learning to share trade
It’s one thing to purchase a single trade for the first time, but it’s another to do it regularly on the advice and education of others. TradingView found that one in three new investors said social media and online forums were among their main sources of education on share trading.
Similarly, in the 2020 ASX Australian Investor Study, almost half (41%) of those surveyed said they prefer to receive investor information via Youtube.
“There is a change of dynamic in the way traders are learning, hallmarked by increased collaboration and a reliance on a community. As a result, a new set of tools and mediums are emerging,” said director of growth in Australia for TradingView, Glenn Leese.
While picking up skills online isn’t a new concept, Leese reminds new investors to ensure their sources are reliable and have the credentials to back up their advice.
“I do believe that community learning is having a beneficial effect on investors and their level of enjoyment. The only caveat is the potential risk for investors to follow the wrong people, and I think online platforms acting as communities have a role to play in preventing this.”
The Covid-19 investing strategy: Fall back or take the plunge?
If you’re a seasoned investor, it’s safe to say the Covid-19 pandemic had some impact on your investment strategy. In fact, figures from the recent ASX Australian Investor Study revealed that more than half (54%) of investors made changes to their portfolio in the first three months of the pandemic, while close to one in ten changed their entire portfolio.
On the other hand, research from RMIT University’s senior lecturer of finance, Dr Angel Zhong, saw a 60% increase in retail trading by individual investors over the lockdown period. She cited rock bottom saving rates, ‘FOMO’ (fear of missing out) and boredom as the top three reasons for the jump.
What are the top financial goals for Aussie investors?
From purchasing property to tucking cash away in a savings account, investing is all about generating wealth for the long term. But for some investors, there are other milestones to hit first.
The same ASX study found that when asked about their financial goals for the next three years, half of the respondents said a holiday followed by paying down debt (34%) and learning to budget more effectively (32%).
Interestingly, only 18% said they intended to purchase their first home, potentially suggesting that the concept of homeownership is becoming increasingly undesirable or unachievable.
Where Aussie investors can find the best online share trading platforms
They say that the first step is always the hardest and purchasing your first share is no exception. But there are a range of tools and platforms that can help you navigate through the market.
Following an analysis of 76 share trading platforms from 29 online share trading providers, the Mozo expert judges uncovered the winners for the 2021 Mozo Experts Choice Share Trading Awards^.
These awards are designed to highlight the products in the market that our expert judges believe are worthy of consideration. For the share trading awards, categories range from casual to regular to active traders, meaning there is an award-winning platform for every kind of investor.
So if you think you’re ready to sign up, why not take your pick from some of the best share trading platforms in 2021.
^More information about our 2021 Mozo Experts Choice Share Trading Awards