Over 1 in 4 Australians are investing in the ASX: report

27% of Australians are actively investing the ASX, a new report by website Finder claims. Click on to find out more on this development.

ASX bank shares buy A young boy in a business suit giving thumbs up with piggy banks and coin piles

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

27% of Australians are actively investing in the ASX, a new report by website Finder claims. The report found Australians saved an extra $113 billion during the coronavirus pandemic but low-interest rates drove Aussies to invest that money in the stock market, rather than their bank accounts.

Over the past year, the S&P/ASX 200 Index (ASX: XJO) increased 30.05%, making 2020 a rather fruitful year to enter the stock exchange game. Of course, the market over a year ago had just crashed due to the pandemic. The one-year anniversary of the crash was last week.  

Let's take a closer look at the details.

More Australians are taking risks with their money

The number of Australians investing who own shares, like in the ASX, lags compared to other nations. Comparatively, 33% of Britons and 35% of Americans are shareowners. However, the number of Aussies who became shareholders did jump over the past year. The number of Australians investing in the ASX increased by 48.2% during the pandemic.

Shares are the most popular form of investment for Australians, followed by exchange-traded funds (ETFs) (10%), additional super contributions (8%), and foreign currency exchange (6%).

One likely factor fuelling the retail trader boom is Australia's historically low-interest rates. Minutes from the last RBA meeting reveal the central bank doesn't expect to raise the official cash rate until 2024 at the earliest.

According to Kylie Purcell, investments product expert at Finder, Australian attitudes to investing money are changing.

"Traditionally, Australia has been a fairly risk-averse nation when it comes to investing," she said.

"But with most people now earning record-low returns on their savings, the stock market has become a more appealing option given its tendency to outperform cash in the long run."

"Although Australia is quite conservative with investing compared to other countries, Finder's research shows that we're starting to catch up as more Aussies look beyond cash to maximise their returns."

The ASX was has been very volatile over the last 5 years

If there's one thing we learnt in 2020, it's to expect the unexpected. Just between February and March last year, the ASX collapsed by 33%. This wiped out 8 years' worth of gains in just 28 days.

While the pandemic was bad for most companies, some sectors thrived. Consumer staples like Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) thrived. Additionally, so did medical equipment companies like CSL Limited (ASX: CSL) and Ansell Limited (ASX: ANN).

One of the best-performing companies over the last 5 years, according to the Finder report, was Domino's Pizza Enterprises Ltd. (ASX: DMP). Its value grew by 44% over the period. Some funds are still rating Domino's as a buy.

The report also found micro-investing becoming increasingly popular with young Australians. Micro-investing is when someone makes very small investments over time with the expectation it will add up to a sizeable nest egg.

Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended Ansell Ltd. and Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Emotional euphoric young woman giving high five to male partner, celebrating family achievement, getting bank loan approval, or financial or investing success.
Share Gainers

Why Bowen Coal, Droneshield, Mesoblast, and St Barbara shares are racing higher today

These shares are ending the week positively. But why?

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Share Fallers

Why Cettire, Digico, KMD, and WiseTech shares are falling today

These shares are out of form on Friday. But why?

Read more »

Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys right now.

Read more »

Broker Notes

Brokers say these ASX growth stocks are top buys

Analysts have good things to say about these shares this month.

Read more »

Share Market News

Bell Potter names 2 of the best ASX 300 stocks to buy in 2025

These could be best buys next year according to the broker.

Read more »

A man looking at his laptop and thinking.
Share Market News

5 things to watch on the ASX 200 on Friday

On Tuesday, the S&P/ASX 200 Index (ASX: XJO) went into the Christmas break with a small gain. The benchmark index rose 0.25%…

Read more »

Hand holding Australian dollar (AUD) bills, symbolising ex dividend day. Passive income.
Broker Notes

Invest $1,000 into Pilbara Minerals and these ASX 200 stocks

Analysts have named these shares as top picks for a $1,000 investment. Let's see why.

Read more »

Happy young couple saving money in piggy bank.
Opinions

Want to start investing in ASX shares? Here's what I'd buy

This is where I’d begin to put my money in the stock market.

Read more »