Australian Economy

Most Australians have money in the financial markets but now might be a particularly risky time to invest

The vast majority of Australians have money invested in the financial markets, whether we regularly think about it or not.

Working-age Australians with super, younger investors new to the market and trading on apps, or those who won’t ever own property — millions of Australians are actively engaged in investing.

Indeed, of those who began investing in the past 12 months, 45 per cent were women, according to the Australian Shareholders Association (ASA).

It’s also been one heck of a ride for investors over the past 24 months as the stock market has crashed, recovered and then bumped along.

“Now is not the time to fly too close to the sun,” says professional investor Danielle Ecuyer.

In other words, she says, it’s a particularly risky time to invest.

What’s different about saving and investing today is that there’s literally nowhere to “hide” without seriously compromising your return on investment.

Let me explain.

A woman with short blonde hair in a pink top poses for a selfie with a book
“Now is not the time to fly too close to the sun,” says Danielle Ecuyer.(Twitter: Danielle Ecuyer)

Inflation has changed the game

Policy makers and financial institutions responded to the global financial crisis by pumping trillions of dollars into markets in part to encourage the flow of credit.

Interest rates dived to record lows and stayed there for years.

Share markets became dependent on cheap money and a once-in-a-generation bull market took hold.

For a brief while, interest rates were at record lows, with the potential of staying low for years, and governments pumped tens and hundreds of billions of dollars into their economies to keep them afloat.

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