64% of Hong Kong investors failed to achieve objectives: survey

Knee-jerk decisions during market volatility could hamper investors from achieving their goals.

Around 64% of Hong Kong investors said that they failed to achieve their investment objectives in the past five years, higher than their Asian (54%) and global (51%) peers, a study by global investment manager Schroders revealed.

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The study found that Hong Kong investors expect an average annual return of 9.6% over the next five years, lower than their Asian (11.5%) and global (10.7%) counterparts. Although they have more realistic expectations, their anticipated returns still exceed the 6.7% five-year annualised returns generated by global stocks as measured by the MSCI World Index, implying over-optimism.

Currently, the average investment horizon amongst Hong Kong investors is just over two years, significantly less than the five-year investment horizon that most investment advisors and professionals suggest.

The survey also found that on average, investors check their transactions 35 times a year or three times a month. However, Schroders noted that their short-term and knee-jerk reactions in times of market volatility could hamper them from achieving their investment objectives.

Almost 8 in 10 Hong Kong investors (79%) made changes to their portfolio risk profile when the MSCI World Index of global equities fell sharply in the first quarter of 2018, with 32% taking more risks and 69% moving into lower risk investments or cash. These actions reportedly suggest that investors may be attempting to time the market--an act that is notoriously difficult if not impossible, according to Schroders.