Rising desire in high-risk investments
Nikkei Research RADAR🄬: Japanese Household Financial Assets Database

• Report

Kazuki Maenosono, Researcher, Solution Unit

Nikkei Research Inc. released its latest edition of RADAR® -- the Japanese Household Financial Assets Database, on February 24.
The survey is conducted annually to understand people's attitudes and behavior toward investments and the households' financial state. The survey was carried out between October and November 2021, targeting households with at least one person, male or female aged 20 and above, within the 40-kilometer radius of the greater Tokyo metropolitan area. A total of 2,843 responses were collected. Unlike online panel surveys, it was conducted by postal mail and in-person. This method allows providing a more realistic picture of the actual situation and attitude of savings and investments. In this article, we will introduce one of the topics from the survey results.

Tsumitate NISA boosts attraction of young generations

We have been monitoring people’s intention to engage in high-risk investments -- whether they would prefer including high-risk/high-rewarding products upon considering their long-term asset management. Results from 2017 to 2021 are shown in Figure 1 and Figure 2.

Figure 1. Intentions towards high-risk investments

*The scores are the weighted average of “Agree”=4, “Somewhat agree”=3, “Do not agree much”=2, “Do not agree”=1.

Figure 2. Historical price change of Nikkei Stock Average (Yen)

Looking at the results by age group, while the middle-aged group (40s-50s) has a mild and consecutive growth, the younger group (20s-30s) and the elderly group (60s+) have up and down in their trend.

First, the elderly group had the largest decline in 2020, where we can assume it was affected by the COVID pandemic, correlating with the Nikkei Stock Average having a sharp drop. It can be said that the elderly who have higher financial literacy, became more cautious in their investing. As in fact, financial literacy was also measured in the survey, and indeed, the elderly group does have a higher level of financial literacy than other age groups.

Next, in the younger group, although the scores of other age groups declined in 2018, the younger age group had a significant increase. This may be related to the "Tsumitate NISA" that started in January of that year. According to Nikkei, “(The penetration of Tsumitate NISA is,) by generation, 70% in the 20s to 40s. The concept of “long-term and easy” seems to be stimulating the working generation’s investment appetite”. Younger people, who are more likely to benefit, became more interested.
In addition, the young generation had a large increase between 2020 and 2021. There would be two reasons for this; the market having strong earnings creating a favorable mood and the influence of social media. One man in his 30s said “I saw an influencer explaining the benefits of reserve investment on social media, and I decided to start investing.”, according to an article by Nikkei.

Despite the trigger and backgrounds that induced curiosity over investment differed by each person, overall, people are showing more interest in engaging with high-risk investments from the previous year. For financial institutes, they may need to be more active in offering and proposing products to not miss this opportunity.

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The survey asks a wide range of questions, including the contacts with sales agent (financial institute) and the total amount invested for each financial asset. Analysis can be drilled down in granular, such as by age group and/or households’ amount of total assets.

A detailed list of survey items is available below.