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Investors undeterred by recent market volatility: Vanguard
Cash flows through Vanguard’s investment platform remained steady despite Russia’s ongoing war with Ukraine.
Investors undeterred by recent market volatility: Vanguard
Cash flows through Vanguard’s investment platform remained steady despite Russia’s ongoing war with Ukraine.
New analysis of activity on Vanguard’s Personal Investor platform has indicated that investors were undeterred by recent market volatility and continued to maintain investment discipline.
Vanguard said that cash flows on its platform had remained steady amid Russia’s war with Ukraine with regular levels of cashing out activity.
“It is really pleasing to see our investors tuning out the noise and staying invested in the share market despite the ongoing volatility, avoiding the most common mistake that has long-term impacts to an investment portfolio,” said Vanguard Australia head of personal investor Balaji Gopal.
“Panic selling during a falling market guarantees that you lock in your losses and conversely, holding on to your investments puts you in good stead for when the market rebounds.”
While cash flows remained steady, the firm noted that both buy and sell trades had dipped in volume during the latest volatility.
Looking at broader investment trends, Vanguard said it had recorded a 63 percent increase in new account openings during the Delta lockdowns between August and October last year.
Additionally, the firm saw a 57 per cent increase in daily inflows and a 64 per cent increase in the number of investors investing daily in comparison to before the lockdowns.
Investors aged 35 and under increased their deposits the most out of all age groups during both the Delta lockdowns (73 per cent) and the ‘shadow lockdown’ in January (14 per cent).
“Whether it’s due to having more discretionary income to invest as a result of social restrictions or the desire to participate in what was a prospering share market, younger investors really used lockdowns to invest to their advantage,” Mr Gopal said.
Vanguard’s analysis also found that female investors were more diversified in their investment selection, with less invested in active funds and individual shares, and more invested in ethical or diversified funds.
The firm also said that women had higher account balances than men on average and were more likely to begin their investment journey earlier by depositing money into their investment accounts soon after opening.
“As research has proven, and as we’ve observed, women make for disciplined, capable investors who practice sound investment behaviours aligned to Vanguard’s principles for investment success,” said Mr Gopal.
“They invest for the long term with half as many female investors than males selling an investment in their first six months of investing, they don’t appear to try to time the market, and they’re well-diversified.”
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