CFSGAM economic and market research senior analyst Ryan Felsman said there has been a surge in retail investor sentiment in the past year, particularly during the final quarter of 2013.
The Equity Preference Index (EPI) developed by CFSGAM and the University of Western Australia’s Business school indicated overall allocations have increased in the past 12 months, especially amongst younger age groups, males and those investors residing in Western Australia.
“The wealth effect of rising house prices and share markets, together with record-low interest rates are key factors behind retail investor buying, continuing the positive equity preference momentum observed since late 2012,” said Mr Felsman.
He said while Australian household spending has remained conservative following the global financial crisis with a strong emphasis on debt reduction, investment in shares has reached a three-year high.
Despite the rise in financial market sentiment, however, there is still a considerable level of retirement anxiety, particularly amongst females.
According to CFSGAM, almost a third of Australians expect a significant financial shortfall during the retirement phase.
The EPI also discovered a link between mortgage delinquency and investor preference for equities.
Outside of superannuation assets, investors in areas experiencing higher mortgage delinquency rates also display a stronger preference for equities compared with investors in areas with little montage stress.
