It’s World Investor Week, backed by the FMA here in Aotearoa, New Zealand. The launch event recognises the digital revolution that has taken place in investing, with the phenomenal growth in the use of online investing platforms such as Sharesies.
Indeed, University of Canterbury’s Investment Society is the fastest growing and largest University club (with around 1,000 members) and a mission to educate the next generation of investors. I personally got started with my investment journey through the tech sector, and as a Board Member with Canterbury Angels it is exciting to see the range of options available both for investors and for companies seeking to capital raise. The launch of Catalist’s stock exchange for SME’s also provides an opportunity for investors looking to diversify.
The FMA’s theme for the week is ‘Investing FOMO – take a mo’ and the FMA will be urging investors to consider the 5 D’s of DIY investing: due diligence, diversification, drip feed investments, seeking advice if in “doubt”, and “don’t freak out if markets go down.”
The results of their survey on retail investor platforms makes interesting reading, with the FMA report here offering a range of insights. Traditional market dynamics are being reshaped, and the FMA needs to understand both the risks and behaviour within digital platforms, and the investing behaviour and motivations of new investors and those using new investing platforms and products. The report states three key factors that are attracting people to online investment platforms:
− Market conditions: low interest rates mean people are looking for new ways of making their money work for them. For many, the housing market seems out of reach and people are looking to other options for wealth creation
−Ease of access to the markets: online investment platforms make accessing the markets affordable and easy
−Sociability: people are talking to their friends and family who are investing, and seeing investment information on social channels
Certainly there has been a positive impact of online investment platforms on the perceptions of investing, with a majority of new investors having doubt in their ability to participate in markets before using online platforms. Investment platforms improve understanding of the markets, offer the ability to get good returns, and are easy to use. Accessibility and a low financial barrier to entry have effectively led to the democratisation of investing, with most new investors feeling more positive about investing and the markets after some experience.
So if you’re interested in investor education, a good first step is to check out an online platform – and of course follow #worldinvestorweek.