Join our investing community

Investors lose faith in advice, markets, life

Discussion in 'General Investing Discussion' started by Tropo, 25th Feb, 2009.

  1. Tropo

    Tropo Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    3,396
    Location:
    NSW
    Investors lose faith in advice, markets, life
    25/02/2009

    Investors are losing faith in themselves as well as markets, their financial advisor and investing generally according to a large survey by The Australian.

    The Australian Shareholders Association says depressed investors should go back to basics and relearn the basic principles which are:
    risk/reward ratio, diversification and expected returns.

    Other survey results indicate that many investors do not understand the basics of investing and are vulnerable to financial scams.

    Source: The Australian
     
  2. Jacque

    Jacque Team InvestEd

    Joined:
    16th Jun, 2005
    Posts:
    1,885
    Location:
    Sydney
    No news there, especially if you're glued to the current media and have a generally depressed outlook.

    I watched Insight on SBS last night- as usual they had a great variety of ppl from all different walks of life discussing the upcoming recession and global crisis. The one thing that stood out, however, was general optimism that we will get through this and that many lessons have been learnt along the way. For most of the audience, it was all about decreasing debt, spending sensibly but not being all out frugal and remaining optimistic. We yet have to see the ramifications and flow-on effects, however, of those who've lost their once-secure jobs. It's too early yet to tell.
     
  3. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    8th Sep, 2007
    Posts:
    1,448
    Location:
    Sydney, NSW
    It's interesting you say that Jacque...

    I met a retired chap last night at the local rotary meeting and we were discussing the current economic climate, he said that this (ie 2008/2009) time is nothing compared to back in 1974. He is an architect by trade and his business had to let alot of people go to stay around.

    I guess alot of people have forgotten their double digit returns for the last 5 years before the crash (ie, 15+20+20+25+30= 110% more than double, then halved...)

    Time will tell.

    Cheers,

    Dan
     
  4. 1300 GET A PLAN

    1300 GET A PLAN Active Member

    Joined:
    2nd Aug, 2008
    Posts:
    37
    Location:
    Gosford, NSW
    People entering the market for the first time now aren't depressed. They love it.
     
  5. Chris C

    Chris C Well-Known Member

    Joined:
    2nd Apr, 2008
    Posts:
    1,327
    Location:
    Brisbane, QLD
    I used to be one of those people that was thinking of all the saving I'd make entering the market at the "bottom" or closer to it, but that was because, like most others, I thought we are going to see a V shaped recovery. When in reality the world could realistically just be heading into a Japanese style L shaped decline.

    Last I heard Japan's Nikkei was at 26 year lows... what comes down doesn't have to go back up. The sooner people realise this the sooner it WILL go back up.

    :cool:
     
  6. dank

    dank New Member

    Joined:
    7th May, 2008
    Posts:
    1
    Location:
    Sydney, NSW
    Hi everyone,

    As you can tell, I'm new here (and to investments in general) and I enjoy reading all the interesting discussions :)

    I don't understand.. are you saying the sooner people realise the market doesn't have to go back up, the soon the market will go back up...???

    If people realise the market won't always go back up in a V shape, would they not become more risk-averse, causing the market to stay down, or go into an L shape as a self-fulfilling prophecy?
     
  7. Chris C

    Chris C Well-Known Member

    Joined:
    2nd Apr, 2008
    Posts:
    1,327
    Location:
    Brisbane, QLD
    I was implying that once people get informed about the reality of investing, particularly that asset prices, be it shares, property, bonds or commodities, don't ALWAYS go up, then a sustained recovery is more likely.

    Most people that have an inadequate understanding of investing will need to get a better grasp of where they went wrong before they will have the confidence to reenter the market. If the majority of people don't learn the lessons of this crisis and choose to remain in fear of investing altogether then the market will likely remain subdued for quite awhile.