Welcome to the Fear and Greed Business Interview. I'm Sean Aylmer. Despite all market volatility, inflation pressures and economic uncertainty, Australian investors are showing remarkable resilience. A new survey from HSBC has found that the majority of investors are keeping calm and sticking to their long term strategies even as markets head up every year. We speak to Donahue DESUSA, head of Investments at HSBC, about the Investor Insights Survey and what it means for investors as they deal with unpredictable markets. Remember this is general information only. You should always seek professional advice before making investment decisions. Don is Head of Investments at HSBC. He joins me in the studio. Welcome back to Fear and Greed.

Welcome to the Fear and Greed Business Interview. I'm Sean Aylmer. Despite all market volatility, inflation pressures and economic uncertainty, Australian investors are showing remarkable resilience. A new survey from HSBC has found that the majority of investors are keeping calm and sticking to their long term strategies even as markets head up every year. We speak to Donahue DESUSA, head of Investments at HSBC, about the Investor Insights Survey and what it means for investors as they deal with unpredictable markets. Remember this is general information only. You should always seek professional advice before making investment decisions. Don is Head of Investments at HSBC. He joins me in the studio. Welcome back to Fear and Greed.

Thanks very much Sean for having me.

Thanks very much Sean for having me.

That's quite exciting that people are actually quite sensible about what's going on at the moment.

That's quite exciting that people are actually quite sensible about what's going on at the moment.

Yeah, it was certainly surprising and very encouraging to see against a backdrop of cost of living pressures. But we did have buoyant markets and that seemed to, I guess, boost investor confidence on the back of seeing those stellar returns that we did see in twenty twenty four, not just in Australia. Of course, there were better returns in the overseas markets and the results showed that.

Yeah, it was certainly surprising and very encouraging to see against a backdrop of cost of living pressures. But we did have buoyant markets and that seemed to, I guess, boost investor confidence on the back of seeing those stellar returns that we did see in twenty twenty four, not just in Australia. Of course, there were better returns in the overseas markets and the results showed that.

Okay, so what were the key insights from this year's survey.

Okay, so what were the key insights from this year's survey.

So the key insights we teased out that sixty four percent of investors were more likely of the one thousand respondents to diversify their portfolio over the next six months. Now, this time last year when we took that, that was like around the fifty percent mark. More importantly, we're seeing this year more than ever, that fifty percent of the respondents had recurring investments or were averaging down and investing regularly over a period of time rather than trying to time or pick the market.

So the key insights we teased out that sixty four percent of investors were more likely of the one thousand respondents to diversify their portfolio over the next six months. Now, this time last year when we took that, that was like around the fifty percent mark. More importantly, we're seeing this year more than ever, that fifty percent of the respondents had recurring investments or were averaging down and investing regularly over a period of time rather than trying to time or pick the market.

So just so I'm going to Donald, going to ask you to explain that you're talking about averaging down. The whole idea is, rather than putting all your money in, putting your thousand dollars in now, you might actually do ten lots of one hundred dollars over time to sort of sometimes you win, sometimes you lose, but you're spreading your risk.

So just so I'm going to Donald, going to ask you to explain that you're talking about averaging down. The whole idea is, rather than putting all your money in, putting your thousand dollars in now, you might actually do ten lots of one hundred dollars over time to sort of sometimes you win, sometimes you lose, but you're spreading your risk.

Yeah, absolutely right, And I think and I think that that is a learned behavior that investors have accepted some period of volatility rather than shying away and staying out of the market. Is to that discipline that they've developed over time of contributing regularly over a period of time. Some call it dollar cost averaging, others just call it regular, regular or recurring investment plans to increase every turn, of course, and those who've invested over that period of time, particularly in the dips, have probably had some really good returns from that initial investment.

Yeah, absolutely right, And I think and I think that that is a learned behavior that investors have accepted some period of volatility rather than shying away and staying out of the market. Is to that discipline that they've developed over time of contributing regularly over a period of time. Some call it dollar cost averaging, others just call it regular, regular or recurring investment plans to increase every turn, of course, and those who've invested over that period of time, particularly in the dips, have probably had some really good returns from that initial investment.

Okay, when was the survey taken?

Okay, when was the survey taken?

So the survey was taken at the very start of this year and effectively covers the period from October twenty twenty four through to the start of March twenty five.

So the survey was taken at the very start of this year and effectively covers the period from October twenty twenty four through to the start of March twenty five.

Okay, so I mean you've got some of the Trump era in there. The point is, it's kind of encouraging that people are behaving this way, particularly when you get the sort of shock that we've had from tariffs, because it actually means people are following a plan, and so long as they don't panic, it will be Okay.

Okay, so I mean you've got some of the Trump era in there. The point is, it's kind of encouraging that people are behaving this way, particularly when you get the sort of shock that we've had from tariffs, because it actually means people are following a plan, and so long as they don't panic, it will be Okay.

Yeah, we're seeing we're certainly seeing a more disciplined approach, and you know, shocks to the market. I think I think investors are anticipating those more more often than than not. If we if we look at the actual poll, seventy percent of the respondents have actually changed their approach in the last six months, and forty percent of that seventy six had actually adopted a more balanced approach. So you could see that obviously on the back of strong international market gains where you saw the NASDAC and the S and P five hundred, you know, up towards twenty twenty nine, twenty five percent, the Magnificent sevens somewhere around the sixty percent mark. So it's not surprising that those investors, obviously on the back of those gains maybe adopted a more conservative approach and were probably well braced for this period of volatility, and.

Yeah, we're seeing we're certainly seeing a more disciplined approach, and you know, shocks to the market. I think I think investors are anticipating those more more often than than not. If we if we look at the actual poll, seventy percent of the respondents have actually changed their approach in the last six months, and forty percent of that seventy six had actually adopted a more balanced approach. So you could see that obviously on the back of strong international market gains where you saw the NASDAC and the S and P five hundred, you know, up towards twenty twenty nine, twenty five percent, the Magnificent sevens somewhere around the sixty percent mark. So it's not surprising that those investors, obviously on the back of those gains maybe adopted a more conservative approach and were probably well braced for this period of volatility, and.

They were hooding more cash, is that right?

They were hooding more cash, is that right?

So they are well, I mean, depending on which investor group, it looked like they were still more in equities and some of the more fixed interest So it looked like that thematic of diversification was definitely taking place. I don't think we saw too much rotation. They did maintain their exposure to equities, they probably diversified that exposure within those equity classes. And what we saw was that you know, financials and technology remained the key sectors to invest in, obviously on the back of those returns as we saw I mentioned earlier on the Nasdaq. Interestingly enough, that survey did tease out that looking forward in the next six months, financials appear to take a bit of a back seat, with investors, unknowingly knowing that the current period of volatility, were probably more inclined to invest in growth technology stocks. I dare say, though, now that they've probably returned and refreshed their view towards the more stable sectors.

So they are well, I mean, depending on which investor group, it looked like they were still more in equities and some of the more fixed interest So it looked like that thematic of diversification was definitely taking place. I don't think we saw too much rotation. They did maintain their exposure to equities, they probably diversified that exposure within those equity classes. And what we saw was that you know, financials and technology remained the key sectors to invest in, obviously on the back of those returns as we saw I mentioned earlier on the Nasdaq. Interestingly enough, that survey did tease out that looking forward in the next six months, financials appear to take a bit of a back seat, with investors, unknowingly knowing that the current period of volatility, were probably more inclined to invest in growth technology stocks. I dare say, though, now that they've probably returned and refreshed their view towards the more stable sectors.

Stay with me, Don, we'll be back in a minute. I'm speaking to Donahue Desusa from HSBC. Now, just before we went to the break, you were talking about the behavior of these retail investors, a couple of people we've spoken too recently. It seems to come through that retail investors perhaps don't get the credit that they deserve, because based on your survey, you have people taking defensive positions ahead of what's happened in the last three or four weeks, thinking about fixed income kind of understanding Magnificent seven US Wall Street. There just seems to be a sense that institutional investors now all I'm not sure that's the case.

Stay with me, Don, we'll be back in a minute. I'm speaking to Donahue Desusa from HSBC. Now, just before we went to the break, you were talking about the behavior of these retail investors, a couple of people we've spoken too recently. It seems to come through that retail investors perhaps don't get the credit that they deserve, because based on your survey, you have people taking defensive positions ahead of what's happened in the last three or four weeks, thinking about fixed income kind of understanding Magnificent seven US Wall Street. There just seems to be a sense that institutional investors now all I'm not sure that's the case.

Don no, I mean there's The survey also pointed out that investors now are turning towards more credible sources of information. They're not afraid to go out and seek financial advice from a financial advisor. They're also turning to more trusted sources of information, be it podcasts like this or the financial institutions. So they're turning away from the influences, aren't. I didn't. I didn't want to say that, but yeah, I mean, look, you know, if you're getting the sources of information and they are from credible resources, they're turning towards education. They're more inclined to do research. The survey show a very low percentage of investors who are not monitoring their investments or who are not undertaking further research. So all signs point to the fact that they're investing in themselves, their own knowledge, and are adopting and embracing.

Don no, I mean there's The survey also pointed out that investors now are turning towards more credible sources of information. They're not afraid to go out and seek financial advice from a financial advisor. They're also turning to more trusted sources of information, be it podcasts like this or the financial institutions. So they're turning away from the influences, aren't. I didn't. I didn't want to say that, but yeah, I mean, look, you know, if you're getting the sources of information and they are from credible resources, they're turning towards education. They're more inclined to do research. The survey show a very low percentage of investors who are not monitoring their investments or who are not undertaking further research. So all signs point to the fact that they're investing in themselves, their own knowledge, and are adopting and embracing.

Those practic is the notabile generate. There is a notable generation difference though, between baby boomers and Gen X versus millennials Gen Z. What is that?

Those practic is the notabile generate. There is a notable generation difference though, between baby boomers and Gen X versus millennials Gen Z. What is that?

So depending on which part of that segment, Certainly in terms of getting started, where we're starting to see probably the millennial and the younger investors think that they need a higher initial investment amount, closer to above twenty thousand. I probably attribute that to a number of things. One the fact that chair markets have done really well and there's probably a concept there that they need to outlay greater to get their foothold in that initial entry, but also potentially because of currency movements, and the fact that the survey also show that, you know, a third of the respondents have their portfolio heavily invested in offshore, not local. And if we break that down from that third that's invested off shore, approximately forty five but just under fifty percent is North America. So again there's there's probably that gap there that they think that they need a larger initial sum to get access to the to the US markets.

So depending on which part of that segment, Certainly in terms of getting started, where we're starting to see probably the millennial and the younger investors think that they need a higher initial investment amount, closer to above twenty thousand. I probably attribute that to a number of things. One the fact that chair markets have done really well and there's probably a concept there that they need to outlay greater to get their foothold in that initial entry, but also potentially because of currency movements, and the fact that the survey also show that, you know, a third of the respondents have their portfolio heavily invested in offshore, not local. And if we break that down from that third that's invested off shore, approximately forty five but just under fifty percent is North America. So again there's there's probably that gap there that they think that they need a larger initial sum to get access to the to the US markets.

And when I was twenty five or thirty thinking about this for the first time, it was really difficult to access the US markets, whereas now my kids they're interested in buying Tesla shares and they can. Yeah.

And when I was twenty five or thirty thinking about this for the first time, it was really difficult to access the US markets, whereas now my kids they're interested in buying Tesla shares and they can. Yeah.

Absolutely, So it's it's just a credit to the industry of how far the providers have come in terms of providing credible sources of information, the education but also listening to consumer demand and the way in which they interact with technology and their own finances. You don't need a lot of money. Now there's there's you know, platforms where you can get access to fractional investing, so you can buy a fifth of a Tesla share and when it cost you all that much, recurring investment plans so you can contribute, you know, like the old regular savings fans and contribute that over a period of time, having their dividends or any distributions reinvested into capital growth.

Absolutely, So it's it's just a credit to the industry of how far the providers have come in terms of providing credible sources of information, the education but also listening to consumer demand and the way in which they interact with technology and their own finances. You don't need a lot of money. Now there's there's you know, platforms where you can get access to fractional investing, so you can buy a fifth of a Tesla share and when it cost you all that much, recurring investment plans so you can contribute, you know, like the old regular savings fans and contribute that over a period of time, having their dividends or any distributions reinvested into capital growth.

So the HSBC survey has been going for a few years. Now what are the key takeouts from this year that you find encouraging particularly.

So the HSBC survey has been going for a few years. Now what are the key takeouts from this year that you find encouraging particularly.

So we're in our fourth iteration of this survey. Every I guess aspect has shown positive results. As I said, investors are monitoring, they're heavily engaged with their portfolios. About seventy six percent of respondents said that they were monitoring their portfolios at least on a monthly basis. The survey also showed that sixty four percent of investors are likely to further diversify their portfolio. That's up from fifty percent last year, and more than half of the respondents are continuing to invest regularly, either dollar cost averaging or they have recurring investment plans, and in the lead up to this period of volatility, seventy percent had already adopted a more conservative approach, with forty percent of them adopting a more balanced approach rather than a growth or a high growth.

So we're in our fourth iteration of this survey. Every I guess aspect has shown positive results. As I said, investors are monitoring, they're heavily engaged with their portfolios. About seventy six percent of respondents said that they were monitoring their portfolios at least on a monthly basis. The survey also showed that sixty four percent of investors are likely to further diversify their portfolio. That's up from fifty percent last year, and more than half of the respondents are continuing to invest regularly, either dollar cost averaging or they have recurring investment plans, and in the lead up to this period of volatility, seventy percent had already adopted a more conservative approach, with forty percent of them adopting a more balanced approach rather than a growth or a high growth.

Very promising. Before we go, anything that you're concerned about from the survey that you would like to see change, no, I think.

Very promising. Before we go, anything that you're concerned about from the survey that you would like to see change, no, I think.

I think investors obviously, if they stick to the current practices of what the survey teased out, we'll certainly see themselves get through this period of volatility. I don't think that there's going to be too much panic that is going to sit in the dusty is going to settle at the end of the day. They if they following their discipline to again recheck what their financial goals and objectives are, make sure that they are on track, diversify further if required, seek professional help if they if they do need advice, and potentially rebalance and shift away from maybe the more volatile sectors.

I think investors obviously, if they stick to the current practices of what the survey teased out, we'll certainly see themselves get through this period of volatility. I don't think that there's going to be too much panic that is going to sit in the dusty is going to settle at the end of the day. They if they following their discipline to again recheck what their financial goals and objectives are, make sure that they are on track, diversify further if required, seek professional help if they if they do need advice, and potentially rebalance and shift away from maybe the more volatile sectors.

Don thank you for talking to Fear and Greed.

Don thank you for talking to Fear and Greed.

Thanks very much.

Thanks very much.

That has done a huge sous a head of Investments at HSBC, this is the Fear and Greed Business Interview. Remember this is general information only. You should seek professional advice before making investment decisions. Join us every morning for the full episode of Fear and Greed, daily business news for people who make their own decisions. I'm Seane Elmer. Enjoy your day.

That has done a huge sous a head of Investments at HSBC, this is the Fear and Greed Business Interview. Remember this is general information only. You should seek professional advice before making investment decisions. Join us every morning for the full episode of Fear and Greed, daily business news for people who make their own decisions. I'm Seane Elmer. Enjoy your day.