Pandemic makes Malaysian investors rethink investment plans

About 52% of the locals are checking the value of their investments more than once a week


ABOUT 85% of investors in Malaysia have spent more time considering their financial wellbeing and reorganising their personal finances since the onset of the Covid-19 pandemic.

According to a study by Schroders titled “Schroders Global Investor Study 2021”, expert investors are more likely to reconsider and spend more time focusing on their financial wellbeing, when compared to intermediate investors and beginner investors.

“People in Malaysia are also checking their investments with great regularity, with 52% checking the value of their investments more than once a week,” Schroders noted.

It added that expectations of investors on returns are reasonably optimistic, as the average annual total return expectation for the next five years is up to 13%.

“Despite the challenges of 2020, it was also a positive year for savings as 58% of people saved as much as they planned, 28% saved more than they planned and 15% did not save as much as they planned,” it said.

In addition, there has been a divide in people’s saving and investment behaviour following the lockdown lift in the country.

Schroders noted that 58% of the population have put more money towards their savings in general.

“This is while 51% have invested more in low-risk asset investments and 38% have invested more in high-risk asset investments,” it said.

Following the investment behaviour, the impact of the pandemic in Malaysia becomes more evident in people’s retirement plans.

“About 80% of non-retired people would like to save more for their retirement as a result of the pandemic, but this doesn’t necessarily translate to expected retirement age,” it said.

Schroders noted that 20% of non-retired people think they will retire later in the wake of Covid-19, while 50% think they will still retire at the same age and 30% think they will retire earlier.

The studies in Malaysia were a commissioned study by Raconteur Media and iResearch Consulting Group, which conducted an independent online survey of 23,950 people, with the Malaysian sample surveyed between July 5 to Aug 2, 2021.

According to the research, the population surveyed were defined as those who will invest at least €10,000 (RM49,049) within the next 12 months and those who have made investment changes within the last ten years.

Schroders behavioural investment insights specialist Stuart Podmore said the pandemic has heightened the population’s sense of uncertainty and challenged the ability to process risk, making many feel more anxious and out of control.

“These sentiments can clearly be seen in the results of our survey, with investors increasingly focused on saving, monitoring retirement contributions and checking their investments more frequently.

“Despite the huge challenges we have all encountered, it is encouraging to see that the pandemic has acted as a catalyst for promoting a stronger focus on generic financial planning and wellbeing,” he said.

He added simultaneously, the population will need to exert caution over the investment returns expected over the coming five years, as the outlook shared by many investors — and in particular those who believe themselves to be experts — is exceptionally optimistic.

“The past 18 months have taught us that the future remains difficult to predict and a measured, consistent and patient approach to investing, focused on long term objectives and probable outcomes, is likely to stand investors in better stead,” he said.

Schroders overall South-East Asia study found investors in the region have also become more attentive to new investment opportunities that are reshaping the world.

“Over the past year, 63% of investors placed their money in stocks and funds invested in internet and tech companies, while 55% invested in cryptocurrencies.

“Nevertheless, safe haven investments also gained traction, with 60% of investors in the region investing in gold, silver and precious metals,” it said.