Sharesies index fell 7 points in the three months ended September to 36. (file image) Photo: 123RF
Investor confidence on online share-trading platform Sharesies has dipped slightly, though the investors that stuck it out and made regular payments have seen higher returns.
The platform's index fell 7 points in the three months ended September to 36, with investors saying they are feeling "cautious" about market conditions.
Co-founder and co-chief executive Brooke Roberts said the weaker US stock market and the leadup to the general elections were key contributers to that.
Sharesies co-founder and co-chief executive Brooke Roberts. Photo: Sharesies / Supplied
However, she said those that kept up with their regular contributions saw good returns.
"We've seen heaps of habitual investing, where people are building their wealth one payment at a time and continuing that and we also saw an increase in trading too."
Roberts said July and August were Sharesies' second and third-highest trading months ever, approaching the record levels seen in November 2021.
Sharesies users that followed a regular pattern of investing saw portfolio returns 5 to 7 percentage points higher than those that took an ad hoc approach, she said.
"Specifically, this higher performing group of investors have followed a strategy known as 'dollar cost averaging', where they invest consistently and at regular intervals into the same set of investments.
"This strategy has also attracted better average portfolio returns over the history of the Sharesies Index, with the level of outperformance growing over time."
However, investors seemed to be keenly aware of the global economic challenges, with declines in the US stock market and low consumer confidence as households serviced higher mortgage rates amid high inflation, Roberts said.
"In addition, as the New Zealand general election approaches, we expect more investors to sit on the sidelines until they know the election outcome."