{"id":1132,"date":"2017-08-23T12:30:35","date_gmt":"2017-08-23T12:30:35","guid":{"rendered":"http:\/\/actinvest.com.au\/?p=1132"},"modified":"2017-08-23T12:30:36","modified_gmt":"2017-08-23T12:30:36","slug":"investors-acting-their-age","status":"publish","type":"post","link":"https:\/\/actinvest.com.au\/index.php\/investors-acting-their-age\/","title":{"rendered":"Investors acting their age"},"content":{"rendered":"<p><strong>Young investors can fall into the trap of being too conservative for their own good, forfeiting compounding long-term returns from growth assets.<\/strong><\/p>\n<p style=\"text-align:center\"><img loading=\"lazy\" alt=\"\" height=\"322\" src=\"http:\/\/www.plannerweb.com.au\/images\/acting-their-age-super.jpg\" width=\"400\" \/><\/p>\n<p>\u00a0<\/p>\n<p>This can lead to the question: How do we tend to invest at different ages?<\/p>\n<p>Of course, a higher percentage of Australians hold much of their investment savings in the default diversified portfolios of the big super funds \u2013 often with extra savings invested outside super.<\/p>\n<p>And the way that investments held outside the big super funds&#039; default portfolios are allocated in different asset classes provides a useful insight into personal investment preferences by age.<\/p>\n<p>Independent consultants Rice Warner includes a look at investor preferences by age and wealth in its Personal Investments Market Projections 2016 report.<\/p>\n<p>This report broadly defines the personal non-super investments market to include all investment assets held by investors in their own names or through trusts and companies. It does not include family homes and personal effects.<\/p>\n<p>Rice Warner&#039; discussion of asset allocation of personal non-super assets by age begins with investors aged 15-24. Parents and grandparents often have made investments on their behalf; and this appears to show up in their asset allocations.<\/p>\n<p>Half of the personal investment assets of investors aged 15-24 are in cash and term deposits \u2013 second only to investors aged over 75 \u2013 and 27 per cent is allocated to life products, investment platforms and managed funds.<\/p>\n<p>Interestingly, 22 per cent of the personal, non-super assets of these investors under 24 are in direct property. Young people generally would not have the money to invest in property by themselves; this percentage suggests plenty of parental help. And they have almost no investments in direct equities.<\/p>\n<p>A point worth noting is that the personal, non-super investment patterns of these young investors seem to setup a broad path for their investing at older ages\u2013 yet with some key variations in asset allocations with age.<\/p>\n<p>Consider these for asset allocations of personal, non-super investments at different ages shown in the Rice Warner report:<\/p>\n<ul>\n<li><strong>Cash and term deposits:<\/strong> aged 15-24 (50 per cent of their assets), aged 25-34 (46 per cent), aged 35-44 (37 per cent), aged 45-54 (38 per cent), aged 55-64 (43 per cent), aged 65-74 (46 per cent) and aged 75-plus (52 per cent).<\/li>\n<li><strong>Direct investment property:<\/strong> aged 15-24 (22 per cent of their assets), aged 25-34 (47 per cent), aged 35-44 (50 per cent), aged 45-54 (47 per cent), aged 55-64 (43 per cent), aged 65-74 (38 per cent) and aged 75-plus (17 per cent).<\/li>\n<li><strong>Life products, investment platforms and managed funds:<\/strong> aged 15-24 (27 per cent of their assets), aged 25-34 (3 per cent), aged 35-44 (7 per cent), aged 45-54 (7 per cent), aged 55-64 (6 per cent), aged 65-74 (7 per cent) and aged 75-plus (14 per cent).<\/li>\n<li><strong>Equities:<\/strong> aged 15-24 (1 per cent of their assets), aged 25-34 (5 per cent), aged 35-44 (6 per cent), aged 45-54 (9 per cent), aged 55-64 (8 per cent), aged 65-74 (9 per cent) and aged 75-plus (16 per cent).<\/li>\n<\/ul>\n<p>Keep in mind that some investors may decide to have well-diversified portfolios for their savings in large super funds and self-managed super funds while taking a different approach for their personal, non-super holdings.<\/p>\n<p>For instance, many investors choose to hold direct property in their own names and perhaps with some cash, fixed-interest, selected direct shares and managed funds.<\/p>\n<p>The appropriate course for the asset allocation of personal, non-super investments will depending much on personal circumstances, including professional advice received.<\/p>\n<p>It can be a pitfall for an investor to look at their personal, non-super portfolio or their super portfolio in isolation when considering the appropriateness of their asset allocations. Consider taking professional advice on this point if you haven&#039;t already.<\/p>\n<p>Some investment habits \u2013 good and bad \u2013 tend to be set at a young age. It is vital to get on the right path at the beginning of your investing life.<\/p>\n<p>\nRobin Bowerman,<br \/>\nHead of Market Strategy and Communications at Vanguard.<br \/>\n09 August 2017<br \/>\nwww.vanguard.com.au<\/p>\n","protected":false},"excerpt":{"rendered":"<p><strong>Young investors can fall into the trap of being too conservative for their own good, forfeiting compounding long-term returns from growth assets.<\/strong><\/p>\n","protected":false},"author":1,"featured_media":1133,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/1132"}],"collection":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/comments?post=1132"}],"version-history":[{"count":1,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/1132\/revisions"}],"predecessor-version":[{"id":1134,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/1132\/revisions\/1134"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/media\/1133"}],"wp:attachment":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/media?parent=1132"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/categories?post=1132"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/tags?post=1132"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}