The low-rate environment means investors are moving towards financial product assets and away from property to earn returns in 2020, according to new research.
Consumer credit financier RateSetter has found that nearly seven in 10 of its users consider low interest rates as having impacted their investment strategy over the course of 2019.
According to RateSetter CEO Daniel Foggo, “low interest rates are the new reality Australians have to face”.
“If the UK is anything to go off, we could be settling in for a decade of low rates,” he advised.
Almost two-thirds of investors surveyed who indicated they would be moving their money in 2020 said they would invest their money in financial products to earn returns over property investments in 2020, it was reported.
Mr Foggo said the company’s insights have revealed the top three factors impacting investors’ decisions.
These are are the need for portfolio diversification, low interest rates and the quest for performance.
With the low-rate environment meaning a number of investors are re-evaluating where they should be putting their money, RateSetter highlighted how there is “a misconception that retail investors are willing to try anything, including speculative products they don’t understand”.
Instead, the credit company reported that “when confronted with low interest rates, investors are sticking with the investments they know and that have served them well”.
Investors have been urged to look for transparency when evaluating alternative investment strategies, with Mr Foggo advising people to watch out for excessive fees or hidden risks.
“If you don’t get how it works, the product is probably not for you,” he indicated.