ASIC report: Crypto hodlers hit refresh more than any other investors

Cryptocurrency investors more likely to check investments than investors in other asset classes
A buy and hold policy favoured with cryptocurrencies, shares, and gold or silver bought more often than sold
Trading habits varied among the sexes with men tending to trade more often than women

How often do you check your investments? According to ASIC retail investor research, which helps the regulator determine where it should concentrate its efforts, Australians like checking their investments, particularly cryptocurrency assets.

This is part two of Stockhead’s coverage on the extensive research which surveyed 1,053 Australian retail investors aged 18 and over who had directly traded in securities, derivatives or cryptocurrencies at least once since March 2020.

Conducted in November 2021, ASIC said the survey results provide a point-in-time snapshot of investor behaviour during a period of increased activity in retail markets, supplementing existing market data and research conducted in Australia and overseas. The report was prepared by SEC Newgate in close consultation with ASIC.

Despite changes to economic conditions, with rising inflation and subsequent interest rate hikes since the research was conducted, ASIC said retail market activity has remained elevated in 2022 compared to pre-pandemic levels.

Cryptocurrency investors like checking their investments

Among owners of each asset class at least half of those investors reported checking their investments once a week or more often, with cryptocurrency being the asset class investors checked most frequently.

Three in five or 62% of all investors holding cryptocurrency said they usually checked their holdings at least daily, while 23% checked them once a week, higher than all other product types.

Buy and hold strategy among investors

Australia is a nation which favours a buy and hold strategy according to the ASIC retail investor research showing trade behaviour. Cryptocurrencies, Australian shares, international shares, and gold or silver were purchased more often than sold post-March 2020.

Around nine in 10 investors who had traded those assets since March 2020 said they had bought them but only around two-thirds reported selling during that time.

Contracts for difference (CFDs) were most frequently traded – weekly or more often – since March 2020. Of those who had traded CFDs 49% indicated they bought them weekly or more often. Exchange traded options (ETOs) and market linked notes (both at 48%) and margin foreign exchanges (43%) were also traded the most frequently.

These products were also the most likely to be sold frequently, with over 40% of those who had traded indicating that they sold CFDs, ETOs, market linked notes and margin foreign exchange weekly or more often since March 2020.

But Australian shares were bought and sold less frequently than other product types, with less than a quarter of investors who had traded Australian shares reporting buying or selling this product at least weekly.

Around one in three or 32% of investors who had traded cryptocurrency reported buying the asset weekly or more often since March 2020, while 23% reported selling it at least weekly.

In a sign of faith for cryptocurrency, more than one-quarter or 28% of investors who had traded cryptocurrency reported ‘never’ selling this product since March 2020.

Men trade more than women, and the Covid-19 impact

Male investors reported both buying and selling more frequently than female investors. 22% of male investors who had traded Australian shares said they sold these at least weekly compared to 7% of female investors.

When it came to cryptocurrencies, 26% of male investors sold these at least weekly compared to 14% of female investors.

More than four in 10 or 44% of all experienced investors (moderately experienced and the most experienced investors) believe Covid-19 had an impact on their trading frequency

One-third or 30% of all experienced investors reported that they were trading more than before the pandemic, and 14% reported they were trading less.

Broken down to sexes, 18% of male experienced investors were more likely to say they were trading ‘a lot more’ than before Covid-19 compared to 7% of female experienced investors.

Just over half of all experienced investors or 56% believed the pandemic had ‘no impact’ on their trading frequency.

How investments are funded

Of those surveyed, 70% reportedly funded their investments from personal income, with a smaller proportion of 24% using dividends and 20% using interest from savings or term deposit/s. A smaller 18% used profits from the sale of other investments.

Those more likely to use dividends to fund their investments included the most experienced investors at 35% compared to 18% of recent investors and 23% of moderately experienced investors.

Investors more likely to use profits from the sale of other investments also included the most experienced investors at 23% compared to 14% of recent investors, along with male investors at 22% compared to 11% of female investors.