Global Investor Study
Investing is prioritised over property and savings
Investors prioritise investing over saving, spending or paying down debts, a major new study has found.
1 November 2017
Investors are prioritising further investment over buying property, paying down debt or putting the money in savings accounts, a major new study has found. Globally, 23% of investors, asked about their plans for their disposable income in the next year, said putting money into markets was a top priority. Only 13% said investing in or buying a property was most important, while 9% wanted to pay off debt.
Schroders Global Investor Study (GIS) 2017, which surveyed more than 22,000 people from around the globe who invest, found the propensity to invest in markets was strongest in Asia and lowest in the Americas and Europe.
What investors are doing with disposable income
Sheila Nicoll OBE, Head of Public Policy at Schroders, said: “Every country has different financial issues but one common theme is that people don’t tend to put away enough money to ensure a secure financial future.
“It is, therefore, encouraging that those who have started investing see the benefits and nearly 40% of investors globally have made either further investing or saving a priority in the next year. An additional 10% have also made their pension a main focus. In contrast, only 11% are prioritising luxury spending.
“If people can make regular saving and investing a habit, it will ultimately make it far easier for them to realise their financial goals.”
The study also found 13% of people prioritised buying or investing in property. This figure was broadly the same across continents. Among millennials, 16% made property their top priority, compared to just 11% among older generations.
There was greater disparity between continents when it came to debt. In the Americas, 11% of people made paying down debt (including mortgages) a priority compared to 9% in Europe and 5% in Asia.
The propensity to make investments a priority showed even greater geographical variance.
Who makes investment a priority?
People in Asia were most likely to prioritise investing in markets:
- 32% prioritised investing, compared to 20% of Europeans and 19% for investors in the Americas.
This pattern was also reflected in results for countries.
The table below shows the countries where people were most inclined to make investing a top priority for the next year. Asian countries are clustered around the top. Western countries, in contrast, are crowded around the bottom, bar the notable inclusion of South Korea at the foot of the table.
The countries that prioritise investing ... and those that don't
In Europe, the highest commitment to investing was in Sweden (29%) followed by Italy (26%) and Portugal (23%).
When it came to prioritising debt, Canada came top globally (18%) followed by South Africa (17%), the Netherlands (16%) and Australia (14%). Chinese investors were least likely to consider clearing debt – only 2% said it was important.
- See the full results from the Schroders Global Investor Study 2017 [hyperlink]
Spending on big-ticket luxuries was of greatest importance in Austria, where 21% of people named it as a top priority. Australia and the UK were in joint second place on this measure, with 17% of respondents making luxury spending a priority. It was of least importance in Taiwan and Indonesia where only 2% and 4%, respectively, made it their primary concern.
Saving remains popular
Given interest rates are so low in most developed countries, and with inflation climbing, the study found a surprising degree of loyalty to saving accounts. By having cash in a bank account, savers are often losing money in real terms.
The commitment to saving was highest in Portugal (29%) and Russia (24%).
We also compared this figure for each country against the proportion planning to invest in markets.
Despite the higher historic returns offered by investments, investors in many countries regarded deposit accounts as the best home for their spare cash in the next year.
Saving was more popular in Portugal, at 29% versus 23% for investment, in Russia, at 24% compared to 18%, and also in France (21% versus 16%).
In Asia, South Koreans also preferred to put money in the bank, at 19% v 12%. Even in the US, which has a strong investing culture, it was at 16% versus 17%.
Prioritisation of saving vs investing
The Schroders Global Investor Study, which surveyed people planning to invest at least €10,000 (or the local currency equivalent) in the next 12 months and who have made changes to their investments within the last 10 years, covers a whole range of investor attitudes and expectations which can be found at schroders.com/gis
It sits alongside Schroders InvestIQ, a new test that aims to improve the abilities of investors.
What is the investIQ test?
Do you make decisions based on logic and reason? The truth is our mind plays tricks on us more often than we realise. It makes us believe we’re thinking analytically, when we may be acting instinctively. So what feels like an informed decision, is actually clouded by behavioural biases.
The same thing happens when we’re making important choices – like how to invest our money.
At the heart of investIQ is a short test developed by behavioural scientists that helps you understand your investment personality. In less than 8 minutes, you’ll get a detailed report outlining which behavioural traits influence you the most, and how best to deal with them.
Take the investIQ test in less than eight minutes. Go to Schroders.com/investIQ
Important Information: This communication is marketing material. The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. It is not intended to provide and should not be relied on for accounting, legal or tax advice, or investment recommendations. Reliance should not be placed on the views and information in this document when taking individual investment and/or strategic decisions. Past performance is not a reliable indicator of future results. The value of an investment can go down as well as up and is not guaranteed. All investments involve risks including the risk of possible loss of principal. Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy. Some information quoted was obtained from external sources we consider to be reliable. No responsibility can be accepted for errors of fact obtained from third parties, and this data may change with market conditions. This does not exclude any duty or liability that Schroders has to its customers under any regulatory system. Regions/ sectors shown for illustrative purposes only and should not be viewed as a recommendation to buy/sell. The opinions in this material include some forecasted views. We believe we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know. However, there is no guarantee than any forecasts or opinions will be realised. These views and opinions may change. To the extent that you are in North America, this content is issued by Schroder Investment Management North America Inc., an indirect wholly owned subsidiary of Schroders plc and SEC registered adviser providing asset management products and services to clients in the US and Canada. For all other users, this content is issued by Schroder Investment Management Limited, 1 London Wall Place, London EC2Y 5AU. Registered No. 1893220 England. Authorised and regulated by the Financial Conduct Authority.