Investing in stocks, shares, and other assets has always been an intriguing avenue for individuals seeking to grow their wealth. And if you’re reading this, more than likely, they interest you too.
With a sample size of 2,000 participants, our survey aimed to delve deep into these individuals’ investment preferences and behaviours. By exploring the statistics derived from our survey, we can gain valuable insights into the investment landscape, identify emerging trends, and inform investment strategies.
- Overall: What are people interested investing in?
- Age Defined Investment Choice
- Gender Investment Preference
- Regional Distribution
- Methodology & Caveats
This comprehensive report reveals a wealth of meticulously gathered facts, figures, and numerical representations. However, for those seeking an immediate breakdown, we have distilled the findings into a concise yet impactful summary below:
- Stocks, Shares, and ETFs are the preferred investment assets (86%).
- Despite their high-risk nature, cryptocurrencies attract 52% of individuals, particularly among the younger generation.
- Options, Futures, CFDs, and Forex are less favoured, possibly due to their complex concepts, with nearly 50% less people showing interest in them compared to stocks and shares.
- Older individuals show less inclination towards cryptocurrency investments, with just 8% interested over the age of 65.
- Property investment interest increases by 6% from the average during the mid-stage of life.
- Forex trading garners the most interest from individuals aged 18 to 24, with 45% showing their interest.
- Investment interest is relatively balanced between genders, with a slight male preference of just 4.3%.
- Londoners exhibit an above-average inclination towards investments.
The Overall Picture: What Are People Interested in Investing in?
The survey results reveal insights into the investment preferences of the surveyed individuals. Across the board, the most popular investment options in 2023 were stocks, shares, ETFs and Tracker Funds.
86% of people within the survey ticked the box that they are interested in or have invested in these assets. Cryptocurrencies were found to be the second most enticing asset class. With 52% of the participants having invested or are interested in this asset class.
Lagging at the bottom of groups were Options/Futures/CFDs (grouped under one category) and Forex, with just 27% and 29% of people ticking this box retrospectively.
What These Statistics Tell Us
- The highest proportion of people are interested in low-risk assets such as Stocks, Shares and EFTs.
- Despite cryptocurrency being a high-risk asset, people seem to be interested in these novel investment opportunities’ high-risk, high-reward outcomes.
- Options, Futures, CFDs and Forex are not very popular, likely because these assets require previous investment knowledge to understand their concepts.
Age Defined Investment Choices
The survey data shows the relationship between age and investment preferences among the surveyed individuals. By examining the age distribution, we can identify patterns and understand how different age groups engage in investing.
Across all age ranges, the majority of respondents expressed interest in or had invested in stocks, shares, ETFs, or tracker funds. The highest percentage was observed in the 45 to 54 age range, with 94% indicating a strong interest in these investment options. However, interest was slightly decreased among the 25 to 34 age group (82%).
The interest in cryptocurrencies varied across age groups. The highest percentage of interest was seen among the younger age ranges, with 66% of respondents aged 18 to 24 and 25 to 34 showing interest or having invested in cryptocurrencies. The interest gradually declined among older age groups, with only 8% of respondents aged 65 and over expressing interest.
The interest in bonds and gilts remained relatively consistent across different age groups. While property or real estate investment showed a similar trend to bonds and gilts, with a slight increase among mid-tier age groups. The highest percentage of interest was observed in the 35 to 44 age range (46%), while the lowest interest was seen among respondents aged 65 and over (15%).
What These Statistics Tell Us
- The older people get, the less inclined they become to invest in high-risk assets such as Cryptocurrency.
- Most people start thinking about investing in property during their mid-stage of life.
- Younger people are most likely to be thinking about investing.
- Participants most likely to trade forex are between the ages of 18 and 24.
Gender Investment Preferences
We also looked at gender preferences between different asset classes. Understanding gender inclinations can be helpful in seeing which gender is best to target for your business.
Stocks/Shares/ETFs/Tracker Funds are favoured by 83% of females and 88% of males — only a 5% different, which isn’t that significant considering the sample size. Cryptocurrency interest showed a more considerable discrepancy between males and females, with 8% more men opting for these investments.
At the other end of the sale, lesser attractive assets, such as Forex, Options, Futures and CFDs, were all favoured by men. Property was the only asset class valued higher for females than males. However, the difference was only 1%.
What These Statistics Tell Us
- There is a roughly equal likelihood of males and females investing, with a slight predisposition of interest tilted towards males.
UK Regional Distribution Investment Stats
According to the data, certain regions have shown a higher than average interest in specific investment options.
London, for instance, stands out with a strong inclination towards traditional investment options like stocks, shares, ETFs, and tracker funds, with an interest rate of 85%. Additionally, London demonstrates a notable interest in cryptocurrencies, with a higher interest rate of 65%, reflecting a keenness for digital assets and blockchain technology.
Despite a relatively lower overall interest, Northern Ireland still exhibits considerable interest in traditional investment avenues, such as stocks, shares, ETFs, and tracker funds. The region also shows a higher interest rate of 50% in property and real estate investments, indicating a focus on the local housing market.
It’s important to consider that these regional differences in investment interests may be influenced by factors such as economic conditions, market trends, and regional dynamics.
What These Statistics Tell Us
- Londoners tend to have a higher than average investment preference.
The Bottom Line: Is Investing Dead?
From looking at the numbers above, it’s no surprise that investing is certainly not dead. If anything, it is becoming more popular and accessible as the years go on.
FinTech companies are popping up all over the place where people can invest money directly through apps on their mobiles. There’s also a lower barrier to entry with an unimaginable amount of information on the internet to guide novice investors through their investment journey.
If you want to get first access to the latest investment tips, click ‘Send Me Tips Tyson’, and I’ll send you everything I’ve got from my data-driven approach to investing.
Methodology & Caveats
To conduct our survey, we collaborated with OnePoll, an established research company known for its expertise in data collection. OnePoll administered the survey on our behalf, targeting a sample size of 2,000 individuals selected from their own panel. The panel utilized by OnePoll is designed to be demographically representative, ensuring that the survey results accurately reflect the broader UK population aged 18 and above.
Our decision to partner with OnePoll was based on their commitment to upholding industry standards and ethical guidelines. They strictly adhere to the Market Research Society (MRS) Code of Conduct and the ESOMAR principles, which govern fair and accurate data collection practices.
While we made every effort to ensure the reliability and validity of our survey findings, it is important to consider certain limitations associated with our methodology:
- Sampling: Although the panel was designed to be demographically representative, there was a potential for sampling bias, as individuals who choose to participate in online surveys may differ from those who do not.
- Self-Selection Bias: Respondents who opted to participate might possess different opinions or behaviors compared to those who declined to take part.
- Response Bias: Respondents may be influenced by social desirability bias or other factors, leading to responses that do not fully reflect their true beliefs or behaviors.
There’s no shortage of books, websites and stock tip newsletters and clubs out there, especially online all claiming they can give you superior returns. They all claim they can do better than the market, and of course I’m no different in that regard.
However, where I am different, compared to what I’ve read online, is in the approach I take in evaluating strategies for stock selection and market timing. And this is my first post to help explain my approach to equities investments.
S&P 500 returns
Today, we’ll start with the US market. Every investor not satisfied with a fund wants to beat the market. The S&P 500, the top 500 stocks in the USA by market capitalisation, has returned 51% in the last 5 years. So 1,000 USD invested would have grown into 1,510 USD. This represents a Compounded Annual Growth Rate (CAGR) of 8.6%. As annual returns go, it doesn’t sound terribly exciting for a lot of people yet that’s the power of compounding.
The Rule of 72
In fact, as a quick aside, if you’re ever wondering how long it will take to double your money or what rate you’d require to double in a given time period, use the rule of 72!
Here’s how it works:
You’re earning 9% annual returns every year and want to know how long it will take to double your money, using the rule:
72 / 9 = 8 years
It also works in reverse. You want to double your money in 3 years, what CAGR rate will you require?
72 / 3 years = 24
Which is 24% every year for 3 years
It’s not exact and yet it’s a reasonable rough estimate.
Back to CAGRs
Beating the S&P500 is the ultimate aim of most if not all active investors. I asked over 10 people in passing the minimum return they’d required to invest in a hedge fund and the answer was always 10%.
It doesn’t like much more than the S&P500 market of 8.6% but it’s actually 16% better. So instead of doubling your money in 8 years, it’s doubled a year earlier in 7.
Naturally, there’s very little risk in putting money into the S&P 500 compared to selecting your own stocks as you’re effectively buying ‘America’.
So to my mind, for the risk involved a fund or service like this one should deliver returns of 16% or more. Thus, quite a bit of research is required on my side to make sure that any recommendations made pass a number of tests.
Why I don’t backtest
According to google, backtesting is the general method for seeing how well a trading strategy would have performed in hindsight using historical data.
If backtesting works, then traders will usually have the confidence to employ it going forward.
In most scenarios, and despite the sophistication of methods to signal when to buy and sell, it’s very difficult to beat the buy and hold strategy. Most of these are based on the speed of stock prices moving averages and get it mostly horribly wrong!
Take the S&P 500 shown below:
History simply doesn’t repeat itself in the same way, so I prefer to use probability which I’ll explain a bit more later.
The ones that get it right are either lucky, know what they’re doing or both! There is most definitely a place for back testing, I prefer a different approach.
The distribution of returns
Given the reason we are here is to increase our ultimate wealth, my decisions revolve around maximising the average CAGR per year over the long term (over 20 years).
Why? Because it’s more robust, and it means that you don’t care too much about short term fluctuations even if they are a bit annoying!
I also like the idea of knowing the average CAGR so that I can use the rule of 72 to get a quick idea of when my money is likely to be doubled.
As mentioned earlier, I prefer probability. Warren Buffet recently said in his recent 2022 Berkshire Hathaway conference that the stock market has become a gambling parlour. You don’t say Warren!
In my view, it always was to quite a degree. And for that reason, I see the stock market as something of a bit of a dice game cum blackjack table. Our job as investors is to improve our returns by getting a statistical edge. Of course to do that, we’ll need to know what the probabilities are.
Just as we all know that the chances of rolling a 6 on a die are 1 in 6, we need to know the probabilities for getting returns on stocks are. By way of example, I’ve plotted a distribution of returns for the S&P 500 based on it’s all time history below.
So if we imagine the stock market as a dice game where you buy a stock, only this die is not 1 in 6 to score an annual return of 30+ percent but 10% probability (1 in 10 chance). Most of the return is in the 0 to 15% range as supported by the average (the red line) of a 12% annual return. Let’s look at the full data table:
As you can see, to date investing in the S&P 500 means your chances of getting above zero returns are pretty good – 50% in fact! So if I invested £100, after 1 year we could expect £112 which is 12% on average. This method of evaluation is known as the expected value and assumes you’d be able to access all 6 annual returns in a year and then take the aggregate.
I’m afraid that isn’t quite the reality as you only get one dice throw!! That is assuming you start with the £100 invested but this time you roll only one die each time, you would actually expect your average annual return to be more like 10.4% which gives you a less impressive £110.
A difference of 1.2% annual return over a year, what gives? Over 1 year the difference seems nothing but it’s still an underrepresentation of reality and over a 20 year period is worth an extra 27%!
Of course, that’s the dice roll in this life, but we don’t know which life we’re in do we? To be less cryptic, for this dice roll we don’t know what the annual returns are likely to be over the next few years, let alone (and most importantly) in what order.
But what if we could simulate the market (i.e. different orders) for different versions of us living in different multiverses? I haven’t managed to find a way to reach the other Tysons living in other multiverses, but I do know maths.
Let us simulate 100,000 multiverses where we have 100,000 Tysons investing the same single sum in the same stock and letting it run for the next 40 years (that’s 40 dice rolls per Tyson) – what is our expected annual return then?
So it seems like 50,000 Tysons out of 100,000 could actually expect a 10.4% annual return and is more representative of reality. If you’re unlucky (like the 5,000 Tysons or the lower 5th percentile), then you can expect 5.6% per year which doesn’t bear thinking in this high inflation economic phase.
You can also see how over time that you’re generally above zero annually throughout the 40 years
Using this perspective and the Monte Carlo simulation method helps me to evaluate investment ideas and stocks before putting out a tip. I’m not only interested in the average return, I’m also interested in minimising risk. And so if that means taking an ever so slightly lower median annual return for a much higher return for the 5th percentile, I’ll take it.
I’d love to say this was all my doing but the reality is that not all of these ideas are my own and I’m partly inspired by the book Fortune’s Formula by William Poundstone and A Man For All Markets by Ed Thorp (which is unputdownable – you’ve been warned!). I will be using Monte Carlo to test famous investment hypotheses put out by the gurus, so as ever – watch this space!
With fun and profit,