• Survey of over 6,500 investors shows rising caution amidst volatility, with 53 per cent of Australian investors having increased their investments and cash savings
• The majority of investors are holding their nerve in instances when markets swing more than 10 per cent
• Despite retirement and financial independence topping investor priorities, most have investment horizons of less than three years

Volatility is set to be the defining feature of markets in 2025. Even as headline trade frictions have eased with recent US agreements, uncertainty persists around sector-specific tariffs, shifting implementation timelines, and the evolving US–China relationship. Added to this are diverging central bank policies, stubborn inflation in some economies, and uneven growth across Asia. Together, these forces point to a year where sharp swings, rather than steady trends, are shaping investment outcomes, creating a backdrop that is testing investors’ ability to remain focused on the long term.

Fidelity International’s Asia Pacific Investor Study sought the views of more than 6,500 individual investors across mainland China, Hong Kong, Taiwan, Singapore, Japan, and Australia, and reveals how investors are responding to turbulent market conditions and positioning themselves to achieve their financial goals. While most recognise the importance of staying invested for the long term, many are adopting a more cautious stance, underscoring the need for resilient strategies that can withstand market fluctuations and support long-term outcomes.

Investor reactions in volatile markets

Amidst 2025’s uncertain environment, 57 per cent of Australian investors have increased their cash savings, 53 per cent have increased their investments, and 47 per cent have increased contributions to their superannuation.

When asked where they would allocate additional funds from a hypothetical windfall equivalent to one month’s salary, Australian investors prefer to add to their investments (32 per cent) over allocating to cash (29 per cent) or paying off debts (19 per cent). This compares to the average APAC investor, who are more inclined to allocate to cash (35 per cent) over investments (31 per cent).

If the windfall was equivalent to a year’s salary, Australian investors are willing to invest slightly more in investments (35 per cent) and less in cash (27 per cent), compared to investors in the broader APAC region where the split is equally across cash (33 per cent) and investments (33 per cent).

The study also examined how investors respond to sharp market swings. When asked how they would respond to a 10 per cent drop in one day in one of their investments, 57 per cent of Australian investors said they would keep their investments unchanged. This was slightly below the general consensus across the APAC region (62 per cent).

Similarly, when faced with a 10 per cent increase in one day, 54 per cent of Australian investors would hold their position. Compared to the APAC region, Australian investors are more inclined to buy more units when markets rise (21 per cent versus 12 per cent), and least likely to sell (21 per cent versus 31 per cent). This indicates a regional difference in risk tolerance.

Simon Glazier, managing director of Fidelity Australia, said “As we continue to live through a highly volatile environment, our investor study seeks to understand how volatility is impacting investor behaviour. The results show Australian investors are more likely to stay invested, and invest more, during periods of volatility in the market compared to the rest of the APAC region. It is during times of uncertainty and volatility that investors can take advantage of opportunities in the market, which would otherwise be out of reach.”

“The data from the survey also indicates Australians are more likely to invest windfalls as opposed to keeping excess capital in cash. What this suggests is that across the APAC region, Australian investors understand the importance of investing and allocating excess cash into assets that can get them closer to achieving their desired return outcome.”

Long-term ambitions, short-term horizons

When focusing on a longer-term timeframe, investors in Australia’s top goals are saving for retirement (52% per cent) and achieving financial independence (50 per cent). Yet only 53 per cent are confident in achieving their financial goals.

Confidence varies across the region, with investors in Australia being the more assured on achieving their top financial goals at 79%, followed by mainland China (69%) and Singapore (58 per cent). This is compared to lower levels in Hong Kong (46%), Taiwan (40%), and Japan (38%).

Despite the long-term nature of these goals, a majority of investors in the APAC region (55 per cent) say their primary investment horizon is less than three years. Fewer than one-third (31 per cent) are investing with a time frame beyond five years. Investors in Australia investors don’t skew from this trend with the majority (59 per cent) having an investment horizon of less than three years, and 27 per cent more than five years. They also expect an annual return of 10.1 per cent for long term investments compared with the average APAC investor expecting an 8.1 per cent annual return. This is the highest expectation in the region.

Simon Glazier comments: “The study indicates that investors in Australia demonstrate the highest confidence levels in the APAC region and maintain a strong sense of optimism regarding their long-term prospects and ability to achieve financial objectives. Although there has been an increased allocation to cash savings this year, investors here continue to expect annual returns of 10.1 percent - the region’s highest projection. However, holding excess cash may not provide the anticipated results. It is important for investors to recognise that remaining invested throughout market cycles, rather than adopting a wait-and-see approach, is essential to realising long-term goals.

“With clear expectations for further market volatility ahead, having diversified portfolios and maintaining disciplined saving and investing will be key. At Fidelity International, our global investment expertise and deep research capabilities enable us to identify companies with strong growth potential, resilience across market cycles, and consistent income generation. This allows us to support investors in meeting a wide range of financial objectives with confidence.”