Crashing cryptocurrency prices, volatile stock markets, declining real estate values, rising interest rates, and skyrocketing inflation have upended many financial portfolios and called into question traditional concepts of safe-haven investments.
According to a recent poll by Send Money Australia, Australians now view superannuation and high-interest savings accounts to be the ideal places to put their money if interest rates and inflation continue to rise rapidly.
Here are the results of the poll:
- Superannuation came in second (with 22 per cent of the vote).
- Third (18 per cent) was an investment property.
- Only 2.6 per cent of people believe cryptocurrencies are the best investment.
The majority of respondents (25 per cent) chose the high-interest savings account, which came in the first place. The outcome highlights the appeal of liquid financial assets and suggests that many Australians may be delaying making investment decisions in the current climate. This year, when interest rates increased, a number of institutions started luring savers in with high-yield accounts.
These banks include Macquarie Bank, Rabobank, AMP, Ubank, ANZ, and Commonwealth Bank. Macquarie Bank and Rabobank each give an introductory rate of 4 per cent, while AMP offers a rate of 3.6 per cent. With 22 per cent of respondents preferring this option, superannuation came in second place, probably due to the 15 per cent tax rate that this investment vehicle gives.
Is property investment a good idea?
Even though investment property is among Australia’s safest and highest-yielding investments, only 18 per cent of respondents said it was the greatest location to put their money. This year, housing prices have fallen at the highest rate since the global financial crisis of 2008, in stark contrast to the real estate boom of 2020–21. In September, property values declined by 1.1 per cent in Melbourne, 1.7 per cent in Brisbane, and 1.8 per cent in Sydney.
With more time to see an unstable property market recover, a higher proportion (31 per cent) of younger respondents (18-34 years) were confident that putting money into investment property would provide the best return on investment. This compares with just 19 per cent of 35-54-year-olds and just 13 per cent of over-55s.
Should I invest in stocks now or wait?
The Australian stock market has had extremely volatile periods over the past two years, with total returns declining by 7.5 per cent in FY2022 after rising by 30.25 per cent in FY21. As a result, only 11 per cent of respondents thought investing in stocks was the best option. Overseas markets suffered even greater losses in FY22, with the Dow Jones losing 10.8 per cent and the Nasdaq losing 24 per cent, undermining investor trust in the safety of international assets.
Only 1.6 per cent of poll participants felt investing abroad was the best place to put their money.
Precious metals or Crypto?
Seven per cent of respondents said they thought gold, silver, and other precious metals offered the best investment return. Historically, while having a track record of stability, gold has seen marginal value growth compared to real estate and stocks.
Cryptocurrency continued to live up to its reputation for high-risk precariousness in 2022, shedding $1 trillion in value just in May and June of this year, while during the same time frame, well-known coins like Luna fell from highs of $116 to $0, wiping away $60 billion from the crypto market.
Australians have not yet forgotten this turbulent time; according to a survey, only 3 per cent of respondents think cryptocurrencies are the best investments. Despite the younger generation’s preference for cryptocurrencies.
The full results, with age and State breakdowns, can be found here.