Most Australians have money in the financial markets, but now could be an especially risky time to invest

The vast majority of Australians have money invested in the financial markets, whether we regularly think about it or not.

Working-age Australians with super-young investors new to the market and trading on apps, or those who will never own a property: Millions of Australians are actively involved in investing.

In fact, of those who started investing in the last 12 months, 45 percent were women, according to the Australian Association of Shareholders (ASA).

It’s also been quite a ride for investors over the past 24 months, as the stock market crashed, rallied, and then stumbled.

“Now is not the time to fly too close to the sun,” says professional investor Danielle Ecuyer.

In other words, he says, it’s a particularly risky time to invest.

What’s different about saving and investing today is that there is literally nowhere to “hide” without seriously compromising your return on investment.

Let me explain.

“Now is not the time to fly too close to the sun,” says Danielle Ecuyer.(Twitter: Danielle Ecuyer)

Inflation has changed the game

Policymakers and financial institutions responded to the global financial crisis by pumping trillions of dollars into markets, in part to encourage the flow of credit.

Interest rates sank to record lows and stayed there for years.

Stock markets became dependent on cheap money and a once-in-a-generation bull market took hold.

For a brief time, interest rates were at record lows, with the potential to stay low for years, and governments pumped tens and hundreds of billions of dollars into their economies to keep them afloat.

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