Recent ASIC research[1] has revealed that one in 10 Australian investors lost money they couldn't afford to lose last year; and that many Australians don't have a good understanding of key investment concepts such as risk, return and diversification.  To help people better understand and manage investment risk, ASIC's MoneySmart has launched a new online Investing Challenge.

'ASIC's MoneySmart Investing Challenge is part of our suite of free tools and resources developed for retail investors to help them make better investment decisions,' Peter Kell, ASIC's Deputy Chairman, said.

ASIC's MoneySmart Investing Challenge comprises three interactive modules designed to promote a better understanding of: risk and return, diversification, and understanding different investment products.

'Research tells us that some investors have trouble gauging what is a good return for a particular investment and sometimes don't really understand how diversification works in practice,' he said.

'ASIC's MoneySmart Investing Challenge lets you test your knowledge of risk and return, diversification and investment products.  It will help you develop the skills needed to understand what sort of returns are reasonable for particular investment products and assess the risks associated with those products.

'These skills are important for anyone investing in the market, including pre-retirees and seniors managing self-managed super or other superannuation money,' Mr Kell said.

Each of the modules in ASIC's MoneySmart Investing Challenge are introduced by financial educator and commentator Nicole Pedersen-McKinnon.  People can choose to answer just a few questions on a topic that interests them, or they can try more challenging multiple questions.  There are also links to detailed content on ASIC's MoneySmart website about the financial products covered.

Mr Kell said he urges people interested in managing their own investments to take ASIC's MoneySmart Investing Challenge and have a look at the suite of online resources available on the MoneySmart website.

'Resources include publications such as Investing Between the Flags, calculators and apps such as the managed funds fee calculator and our Invest smarter section of the website,' he said.

Background

As the Australian Government agency responsible for financial literacy, ASIC leads and coordinates the National Financial Literacy Strategy 2014-17 which was launched on 1 August 2014 following extensive consultation. 

Financial literacy is about having the knowledge, skills, attitudes and behaviours necessary to make sound financial decisions, based on personal circumstances, to improve financial wellbeing.

For more information about the National Strategy and its supporters visit:  www.financialliteracy.gov.au 

ASIC's MoneySmart website at moneysmart.gov.au is a comprehensive source of free, trusted and impartial financial guidance and tools to help Australians make decisions about all aspects of personal finance.

[1] Source: Australian Financial Attitudes and Behaviour Tracker, Wave 3, p29