Endowus Wealth Insights Report 2023: Over 60% of Singaporeans have investing experience, yet more than half still invest emotionally

• A new study by Endowus has found that over half of Singaporeans with investing experience only invest when ‘the time is right’ 
• Inflation and rising prices of goods and services continue to be the top financial concerns for Singaporeans in 2023
• Singapore respondents are more pessimistic about their financial health than Hong Kong respondents

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The 2023 edition of Endowus’ Wealth Insights Report found that over 60% of Singaporeans have investing experience, yet more than half still invest emotionally when ‘the time is right’. 

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This year, persistent anxiety around inflation is driving investors of all ages to make decisions driven by emotion, especially against a backdrop of market uncertainty fuelled by the fallout of Silicon Valley Bank and Credit Suisse. 

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Inflation and the increase in the cost of goods and services (86%) remain the biggest financial concern in 2023 for Singapore respondents across all age categories. Three in five respondents stated they are ‘not at all confident’ that the economy will recover, and less than half (47%) are confident that they have sufficient funds for retirement.  

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The annual report, now in its second year, was commissioned by Endowus to better understand sentiments on the economy, personal financial health and investment habits of those residing in Singapore (n=700) and Hong Kong (n=701). The study was conducted between March and April 2023 among an audience set aged 20 and upwards. For more findings, please refer to the Appendix.  

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Singaporeans adjust financial strategies to cope with rising inflation and economic uncertainty 

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These concerns are prompting Singaporeans to relook their investing goals. One in three are looking to invest more this year, stating they want to do so to build a retirement nest egg. A majority (62%) cited the eroding effects of high inflation on their cash savings as a reason for investing more. 

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This has had a positive effect, prompting Singaporeans to be more proactive with financial planning. In the last quarter of 2022, a record S$2.7 billion was withdrawn from CPF members’ Ordinary Accounts (OA) for investment, more than any quarter since 2018. In 2022, CPF investments in Endowus’ CPF Flagship Portfolios have increased by more than 30% despite market volatilities.

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Singaporeans are also turning to other methods to cope with inflation and the rising costs of living. Close to 70% of respondents said that their goal is to save more money this year, followed by exploring new passive income opportunities (56%). 

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Singapore millennials, in particular, are concerned that their salaries will not keep up with rising expenses (68% vs. 59% for Gen Zs). They also belong to the group, commonly termed as the ‘sandwiched generation’, that is most likely to explore passive income opportunities in 2023 through multiple avenues, such as securing side employment opportunities, collecting rental income, and investing in passive income products (61% vs 48% for Gen Zs). 

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Singapore lags behind Hong Kong in optimism over economic recovery 

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Singapore respondents are significantly less confident of economic recovery compared to Hong Kong respondents (60% vs. 43%), spurred by concerns over rising inflation and interest rates, as well as the volatile stock market. Conversely, Covid-19 recovery and the reopening of China’s economy have given a positive boost to respondents in Hong Kong, fuelling economic confidence. Hong Kong respondents have higher expectations for “people to spend more money” (44% vs 28% for respondents in Singapore). 

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As a result, 2 in 5 (43%) of Singaporeans are pessimistic about their personal financial health, while only 30% of Hong Kong respondents feel the same. This has led to a sense of caution among Singaporeans when it comes to investing their money – when asked about their investment risk appetites, less than half (41%) of Singaporeans noted that they are willing to grow capital by taking some risks, as compared to 54% of Hong Kong respondents. 

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A worrying investment trend: A majority of Singaporeans, with or without investing experience, are prone to timing the market  

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Despite the growing desire to invest, build a more robust retirement nest egg and beat inflation, the study also revealed a worrying trend of emotions-led investing. 

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Over half of Singaporeans with investing experience only invest when they feel ‘the time is right’, and this is especially so for new or inexperienced investors. The study noted that respondents who don’t have any investing experience are also more likely to invest when they feel the time is right (66% vs. 50%). 

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As a result, Singaporeans may be setting themselves up to be exposed to greater risk and volatility by timing the market. Passive, evidence-based investing has been proven to help investors to get a return that compensates them for the risk that they take than active trading. 

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Financial education is more than ever, an important need for Singaporeans 

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More than a third of Singaporeans go to friends and family for financial and investment advice, as compared to other sources like financial editorials, as well as news and media publications. Breaking this down further, those without investing experience (55%) are more likely to consult their friends and family, as compared to 38% of respondents who have investing experience. Most concerning are the 10% of Singaporeans who do not seek financial advice from any sources. 

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Those who have investing experience are likely to turn to online investment platforms for investment and financial advice (43% vs. 27% without investing experience). Across generations, Millennials (42%) are more likely to take recommendations and advice from financial blogs than the Gen X + (26%). 

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“While it is good to see that a majority of Singaporeans have investing experience and are taking the steps to seek out investment knowledge, there is a lot of work to do in providing individuals with the knowledge and advice to invest well towards wealth goals, and differentiate investing and managing wealth from speculating and trading. In this volatile climate, it is ever more important for investors to keep to heart the core pillars of investing well – creating well-diversified portfolios towards specific goals, automated and maintained at suitable risk levels, implemented with best-in-class solutions at a low fair cost.” said Gregory Van, CEO at Endowus. 

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Since its founding, Endowus has been an active contributor to enabling financial literacy for individuals and its community through creating a library of financial content tailored for users across life stages. It recently launched Empower, a community impact initiative focused on supporting underrepresented, underserved, and underprivileged groups in reaching their wealth and life goals.

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Crossing over US$4 billion in client assets, Endowus has returned almost US$5 million in trailer fees paid as cashback to its clients, and created over US$15 million in total savings. In April 2023, Endowus officially launched in Hong Kong as the territory’s first fee-only, non-commission-based and conflict-free digital wealth management and fund platform. 

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