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Investor confidence drops

Investor confidence is at the lowest it has been in more than three years, a new survey shows, and it’s being cited as a reminder of the value of advice.

Wednesday, November 6th 2019, 10:09PM

The ASB Investor Confidence Survey for the September quarter shows confidence has fallen from a net 15% to 8%.

A reading of zero would indicate as many people were optimistic as were pessimistic.

The decline was driven by declining confidence in housing, particularly in Auckland, and in term deposits.

Confidence in managed funds and KiwiSaver also slipped.

“There’s not one big thing that has dented confidence in recent months. It’s more a case of expectations about the returns on a number of investments slipping over this period,” said ASB senior economist Chris Tennent-Brown.

Most respondents viewed term deposits, managed investments or superannuation as having the worst return on investment in the coming year.

Tennent-Brown said the sentiment about term deposits was understandable.

“Term deposits have been the main investment for a large number of New Zealanders for years. The returns have been particularly important for savers wanting an income stream in retirement.

“Kiwis were able to get much higher returns on term deposits 10 years ago, but rates have been falling over the past decade. Now the rates people get are below 3%, which we haven’t seen since the 1960s. So it’s not surprising this is frustrating savers and denting confidence in the older age brackets of the survey."

He said a drop in investor confidence did not always precede a period of poor outcomes.

In 2016, confidence was low but the share market delivered strong returns and house prices rose strongly in many parts of New Zealand.

“It shows the role financial advice has to play. If people are losing confidence in investing we need to make sure they are losing it for the right reasons.”

He said it was not a great time to change a well-thought-out investment strategy.

Advisers could help people maintain a long-term view, he said.

Meanwhile a survey by Chartered Accountants Australia New Zealand found 30% of retail investors have a “great deal” or “quite a bit” of confidence in NZ capital markets; 55% have “some confidence”; while 12% have “no confidence at all”.

Tags: ASB investment investor confidence

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Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 3.95 4.49
ANZ Special - 3.55 3.45 3.99
ASB Bank 5.20 4.05 3.95 4.39
ASB Bank Special - 3.55 3.45 3.89
BNZ - Classic - 3.55 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 4.30 4.20 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.55 3.45 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime - - - -
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - ▼3.55 3.39 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.35 4.04 4.02 4.39

Last updated: 11 November 2019 4:01pm

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