DIY investors are set to put their “money where their mouth is” this year, with almost 95% of investors planning to take on more investment risk in the next three months, according to a survey by Charles Stanley Direct.
Asked to rank their risk appetite for the next three months, 34% of respondents planned to take a ‘very high’ or ‘high’ risk approach to investing, with 10% set to take on a significantly higher risk profile than average.
By contrast, just 19% of respondents were planning to pursue a low-risk strategy over the next three months and a mere 4% of the approximately 1,000 DIY investors surveyed planned to take no additional risk at all.
Crucially, this greater risk appetite is being driven by young investors, with 61% of ‘gen-Z’ planning a ‘high risk’ approach, compared with just 39% of ‘millennials’ and 9% of ‘baby boomers’.
Investors with a financial adviser also reported plans to increase their risk appetite. According to the firm, 67% of DIY investors taking financial advice had plans to expand their risk appetite in the next three months, compared to just 33% of those without.
Rob Morgan, chief investment analyst at Charles Stanley Direct, said: “Younger investors, and investors that take financial advice, are driving forces of optimism, and rightly so.”
These more bullish investment strategies, Morgan said, are the result of a much greater enthusiasm for the wider stock market among investors.
Indeed, the survey found that more than 70% of DIY investors expected the FTSE 100 to rise in the next six months. Younger investors were again particularly enthusiastic, with more than 80% of gen-Z expecting the FTSE 100 to rise.
Morgan added: “Despite a rocky global market dip at the beginning of the month, the FTSE is up 6% year to date and rebounding well.”
“Investors who have been actively increasing their exposure to UK equities over the past three months -– at a higher rate than their global investments – will be well positioned to realise their financial ambitions faster and more effectively than their passive peers.”
This more bullish attitude has resulted in 40% of DIY investors increasing their exposure to the FTSE 100, and 35% adding to FTSE 350 names.
Morgan said: “Now, the future looks bright, with expectations for higher growth, lower interest rates, and something that looks suspiciously like stability.”