The inaugural GXIQ Investor Scorecard 2026 from Global X has found a clear relationship between investment knowledge and investor behaviour.
Australian investors with higher levels of investment knowledge are more likely to diversify across different assets and regions, follow an investment strategy and focus on investment costs.
The average Australian investor scored 63 out of 100 in the GXIQ assessment, which tests knowledge of diversification, compound interest, risk, tax and investing fundamentals. Just 15% of current investors reached the Advanced level, scoring 90 or above.
So, what can we learn from Australia's most knowledgeable investors?
1. They have a strategy
Do you know why you own each investment in your portfolio? For some investors, the answer might be straightforward: they are saving for retirement, building a deposit or creating an alternative source of income. Others may be building wealth for their family.
The GXIQ research found that Beginner investors (those with lower investment knowledge) are more than five times as likely as Advanced investors to say they invest without any strategy.
A strategy doesn't need to be complicated. It could mean deciding what you're investing for, how long you plan to invest, how much risk you're prepared to take and how you'll spread your money across different investments.
It can also give you something to fall back on when markets become volatile.
2. They don't put all their eggs in one basket
Diversification is one of the clearest differences between Australia's less and more knowledgeable investors.
Advanced investors are almost three times as likely as Beginner investors to diversify across different types of assets. They are also four times as likely to diversify across different countries or regions.
That matters because even an investment that feels familiar can carry risks if too much of your portfolio depends on it.
Our research found that property remains the preferred investment among Beginner and Intermediate investors. Among Proficient and Advanced investors, the preference shifts towards Australian shares, additional superannuation contributions and ETFs.
For younger, knowledgeable investors, ETFs have overtaken property as the preferred investment.
The key takeaway here is to look at your portfolio as a whole, rather than judging each investment in isolation. Ask yourself this question: if one company, sector, asset class or market fell sharply tomorrow, how much of my portfolio would be affected?
3. They understand that risk can come from being too concentrated
Risk is one of the most important yet misunderstood concepts in investing. Our research found that 52% of Beginner investors describe themselves as low risk, compared with 18% of Advanced investors.
That doesn't mean Advanced investors are simply taking more risk. The research suggests that investors with higher levels of knowledge are more likely to think about risk across their whole portfolio and how different investments behave in different market conditions.
Consider an investor who owns a small number of companies they know well. It may feel comfortable because those investments are familiar. But if one company, sector or market makes up a large part of the portfolio, a fall in that area can have a much bigger impact.
Understanding risk means looking beyond the label of an investment and considering how your investments work together.
4. They know what they're paying for
Investment costs can be easy to overlook. When markets are moving, most investors are focused on whether their portfolio is going up or down. Fees and other costs can seem like a much smaller concern.
But the GXIQ research found that Advanced investors are twice as likely as Beginner investors to focus on low-cost investments.
Over time, even relatively small costs can add up.
That's why it’s worth understanding what you're paying for when you invest, whether that's management fees, brokerage or other costs associated with buying and selling investments.
Do you really know what you're paying to invest and what you're getting in return?
Low-cost investments like ETFs can be one way investors access diversified exposure to a market. Whatever investment you choose, understanding the costs should form part of the decision.
5. They keep learning
Investment knowledge isn't something you need to have before you start investing. It can develop over time.
Among Advanced investors under 50, AI tools, online forums and YouTube are used as sources of investment information at around twice the rate seen among investors over 50.
Investors now have access to more information than ever before at their fingertips. However, more information doesn't automatically mean you’re more knowledgeable.
Being a knowledgeable investor also means knowing what to question, understanding the basics and checking important claims before acting on them.
Whether you're learning about diversification, tax, interest rates or a new investment, building your knowledge can help you make sense of the information coming at you from every direction.
The smartest investment might be knowledge
The smartest investor isn't necessarily the person who can name the most stocks or predict what the market will do next.
The GXIQ research points to something much more practical. Australia's most knowledgeable investors tend to have a strategy, diversify across assets and regions, think carefully about risk, pay attention to costs and keep learning.
These are all are habits that can be developed over time. Remember: you don't need to know everything before you start investing. But understanding more about how investing works can help you become more confident in making decisions that fit your goals.
How does your investment knowledge compare? Take the free 15-question GXIQ quiz and discover your score.
