Illiterate investors will hurt us all
Article by ASIC Deputy Chairman, Jeremy Cooper. (An edited version of this article was published in the Australian Financial Review on 22 February 2008).
We are nearly all retail investors. Because of compulsory superannuation, the vast majority of Australians, even if they don't think about it much, have some investment exposure and exercise investment choice.
In 1989, the collective net worth of retail investors was $1.2 trillion or 337 per cent of gross domestic product. In 2007, that had grown to $5.1 trillion or 485 per cent of GDP.
While the net worth of retail investors has been rising, their lot has become harder – there are so many choices and today's financial products are complex.