By Rachel Waterhouse, CEO, Australian Shareholders’ Association

Geopolitical tension has unsettled markets and weakened investor confidence, but the latest Australian Shareholders’ Association Investor Sentiment Survey suggests retail investors are responding with more discipline than fear. The survey, conducted between 27 March 2026 and 7 April 2026, received 226 responses, with a further 119 investors providing open-ended comments. The overall picture is not one of panic. It is one of caution, selectivity and a willingness to stay engaged when markets become more volatile.

Retail investors are uneasy, not retreating

More than half of respondents, 56.0 per cent, said current geopolitical tensions have made them somewhat or much less confident as investors over the next 12 months, while only 2.2 per cent said they were more confident. That is a meaningful deterioration in sentiment. But behaviour tells the more important story. Despite weaker confidence, 56.2 per cent said they are mostly holding their current positions and waiting, while a further 24.8 per cent said they are selectively buying opportunities created by volatility. That combination suggests many retail investors are not rushing for the exits. They are staying patient, alert and engaged.

Volatility is also creating opportunity

One of the most interesting findings is that investors are not only focused on risk. They are also looking for value. When asked what they are watching most closely in the companies they own, the largest group, 29.6 per cent, nominated valuation opportunities created by market overreaction. That was ahead of earnings exposure to affected regions or markets at 15.9 per cent, energy costs, input costs or inflation pressure at 15.0 per cent, and board quality, management credibility or risk oversight at 13.3 per cent. In other words, investors are not simply reacting to headlines. Many are asking whether share price moves are justified, whether earnings remain resilient and whether leadership teams are equipped to manage through uncertainty.

This is an important point for long-term investors. Periods of geopolitical disruption can create genuine risks, but they can also create mispricing. When sentiment weakens quickly, quality companies can sometimes be marked down alongside weaker ones. The survey suggests many retail investors understand that distinction. They are not assuming every fall is a buying opportunity, but nor are they assuming every setback is a reason to sell. They are weighing risk against value with greater care.

Caution with capital, but not paralysis

The survey also points to a careful approach to fresh capital. Over the next three months, 34.1 per cent said they would add gradually to existing investments, while 27.0 per cent said they would keep more in cash or term deposits. Another 13.7 per cent said they do not expect to invest new money over that period. This is not the behaviour of investors trying to chase every swing in the market. It is the behaviour of investors preserving flexibility while remaining ready to act if quality opportunities emerge. In volatile periods, holding some cash can be defensive, but it can also provide optionality.

The open-ended responses reinforce that picture. Many investors described a wait-and-see approach, spoke about holding cash, waiting for opportunities and avoiding panic. A smaller but notable group said they were rotating selectively towards areas such as energy, defence, gold and commodities, or trimming exposure to the US. Others said they were watching tariffs, stagflation, sovereign risk, AI impacts and company leadership more closely before making their next move.

What investors should expect from companies

In periods of geopolitical tension, investors are not only reassessing markets. They are also reassessing companies. The survey findings suggest retail investors want confidence that boards and management teams understand the risks, are making disciplined decisions and are communicating clearly with shareholders. That expectation matters. When confidence is fragile, judgement, credibility and oversight become more important, not less.

For investors, that means looking beyond the share price. Companies should be able to explain their exposure to disrupted regions, rising costs or weaker demand. They should be clear about how they are responding, where the risks sit and what assumptions underpin their strategy. In tougher conditions, strong leadership is not just about operational performance. It is also about transparency, discipline and the ability to maintain shareholder confidence when conditions are unsettled. This is where governance becomes a practical investment issue, not just a principle.

Five practical lessons for investors

1. Do not confuse volatility with a need for action. Sharp moves create pressure to react. But selling into weakness locks in losses, and buying on impulse ignores risk. If nothing has changed in a company’s earnings outlook, a falling share price may reflect sentiment, not fundamentals. During the initial COVID sell-off in March 2020, investors who sold quality holdings at the bottom missed one of the fastest recoveries in market history.
2. Test whether the market has overreacted. Compare a company’s current valuation to its five-year average P/E or EV/EBITDA. Check whether consensus earnings estimates have actually been downgraded or whether the share price has simply fallen on broader sentiment. A stock trading below its historical range on unchanged earnings deserves closer attention, not less.
3. Add gradually, not impulsively. A staged approach — spreading purchases over weeks or months — helps manage timing risk while keeping you engaged. It also removes the pressure of trying to pick the bottom.
4. Focus on resilience. Earnings quality, balance sheet strength and leadership credibility matter more when markets are unsettled. We have seen this play out in real time. CBA has outperformed since the initial geopolitical shock — not because banks are immune to disruption, but because investors gravitate toward strong balance sheets, diversified earnings and proven management when uncertainty rises. Companies with pricing power, low gearing and diversified revenue tend to hold up better. Watch for the opposite: companies where net debt has risen sharply or where earnings depend heavily on a single region or customer.
5. Use reporting season and AGM season as your checkpoint. Rather than reacting to daily headlines, use upcoming results and AGMs to test whether leadership is addressing risks directly. Are boards disclosing their exposure to energy cost increases and supply chain disruption clearly? Are they explaining the assumptions behind their guidance? That is exactly the kind of scrutiny ASA’s company monitoring program is built to support — and exactly the kind of question shareholders should be asking at AGMs this year.

The broader message from the survey is encouraging. Retail investors are feeling the strain of a more unstable world, but they are not switching off. They are approaching markets with greater selectivity, sharper attention to value and a close eye on risk and leadership. In times of geopolitical turmoil, that may be exactly the mindset long-term investors need.