Suite 8 / 260 Auburn Road, Hawthorn 3122
Phone: 03 9214 4100
Fax: 03 9818 6008
enquiries@trumpetfinancial.com.au
 
 
eWombat Search
 
Hot Issues
Powerful Budgeting, cash flow and Super Tools available on our site.
Australia's leading causes of death - ABS
Australian Dietary Guidelines and healthy eating chart (PDF)
Government introduces first home scheme laws
Are young investors wasting their youth?
ATO granted super enforcement powers
The great Australian (retiree) dream
ATO to release further guidance on reserves
A real-world benchmark for SMSF performance
How is your super going, ready for retirement?
Our 'hardest' SMSF tasks
Lack of literacy promotes unrealistic goals
Young investors: Time is on your side
Is your SMSF retirement-ready?
Key Economic Indicators, 2017 - updated
Investors acting their age
ATO locks in details, addresses panic on real-time reporting
Government ‘undermines’ tax system in new moves on property expenses
Multiple super accounts in a 'gig' society
Why Australian retirees aren't happy and what we can do about it
Doing a budget is a good idea but ....
Technical expert flags estate planning strategies for 2017-18
Government to shut down salary sacrifice loophole
Items that heat up your depreciation deductions
‘Tens of thousands’ of SMSFs at risk with ECPI
Do’s and don’ts of estate planning
LISTO to help boost women’s super
Smart ways to stretch retirement money
Low economic growth likely for years
Recorded Crime - Offenders, 2015-16
Adequacy of savings still a concern among Australians
‘Bank-like heists’ make way for new wave of cyber crime
Give your children a saving and investing edge - for life
Articles archive
Quarter 2 April - June 2017
Quarter 1 January - March 2017
Quarter 4 October - December 2016
Quarter 3 July - September 2016
Quarter 2 April - June 2016
Quarter 1 January - March 2016
Quarter 4 October - December 2015
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
Young investors: Time is on your side

Today's young investors weren't alive when The Rolling Stones, among others, released versions of Time is on my side yet the song's title just about sums up their lengthy investment horizon.



       


 


Young investors truly have time on their side.


By starting to invest as early as possible with enough exposure to growth assets, young investors typically have plenty of time to ride through numerous investment cycles, cope with share market volatility and enjoy long-term compounding returns.


And young investors have much more time to recover from investment setbacks. They have pre-retirement investment horizons of up to 40-plus years and then many years of investing once eventually retired.


Young investors should have target asset allocations for their portfolios – the proportions of assets in different asset classes of mainly shares, property, fixed interest and cash – that reflect their usually higher tolerance to risk.


Unfortunately, many young investors may invest too conservatively for their own good.


The ASX Australian Investor Study 2017, carried out by Deloitte Access Economics, comments on a "disconnect between investor risk profiles and their return expectations". (The study focuses on investors who have at least some investments outside the big APRA-regulated super funds.)


Researchers found that young investors generally appear more risk averse than older investors, contrary to "conventional expectations" and challenging investor stereotypes. For instance, a very high percentage of investors under 35 were seeking guaranteed or stable investment returns.


The study comments that the risk aversion of young investors may be related to their growing up in the time of the global financial crisis (GFC). Their greater unwillingness to take risks might be linked to their inexperience as investors and level of their financial knowledge.


As the study comments, diversification is one of the most-effective ways to manage investment risk.


A well-diversified portfolio with a long-term asset allocation to reflect a young investor's tolerance to risk spreads the risks and opportunities as well as helping to smooth returns from growth assets over the long haul.


A fundamental understanding for young investors is to realise that time is on their side.


 


Robin Bowerman,
Head of Market Strategy and Communications at Vanguard.
09 August 2017
www.vanguard.com.au




6th-September-2017
Trumpet Financial Pty Ltd ABN 11 443 516 384 Corporate Authorised Representative (No 327756) of Aon Hewitt Financial Advice Limited AFSL 239183 ABN 13 091 225 642
Registered Address: Level 33  201 Kent Street, Sydney NSW 2000 | Sitemap | Disclaimer | Privacy Policy | About Aon Hewitt Positioning