Investor confidence rises despite recession fears - Investments - News - Moneyfacts


Investor confidence rises despite recession fears

Investor confidence rises despite recession fears

Category: Investments

Updated: 19/10/2010
First Published: 19/10/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Investors are regaining confidence in the markets after research revealed almost half of active investors intend to increase their stock market investments in the coming months.

By comparison, the latest survey by the Association of Investment Companies (AIC) suggests that just one in ten investors are planning to decrease their investments in the near future.

Resources and commodities have overtaken blue chips as the most popular sector, with around a quarter of active investors finding them the most attractive sector.

These were closely followed by blue chip companies (23%) and then pharmaceuticals (15%), utilities (9%), commercial property (7%) and financials (7%).

It is the first time since the AIC began the poll that blue chip companies have not been the most popular sector, suggesting that investors are attempting to spread their holdings across a wider range of investments in order to diversify risk.

Home still remains very much where the heart is for most people, with almost two thirds of active investors currently favouring the UK. However, an increasing appetite for riskier investments and the desire to diversify portfolios has meant that the love affair with emerging markets is gaining momentum.

With a change in Government this year, investors remain nervous about the impact of the financial crisis on their finances.

Yet despite the threat of a double-dip recession being at the forefront of many people's minds, investors were found to be saving less than they were this time last year.

"With markets still proving unpredictable, it is not surprising that investors are remaining cautious and are clearly worried about the threat of a double dip recession," said Ian Sayers, AIC director general.

"Despite this caution amongst investors, an ever increasing number are favouring emerging markets, highlighting an increasing appetite for risk and the popularity of this sector."

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