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Investors stay calm despite market troubles

Investors stay calm despite market troubles

Category: Investments

Updated: 07/11/2011
First Published: 07/11/2011

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 It is now over 6 months old so the content may be out of date.

UK investors are keeping a calm head despite bearing witness to the frantic to-ing and fro-ing in the markets of late.

While the volatile market swings created by the uncertainty over the Eurozone have had a negative impact on investor confidence, the latest research from the Investment Management Association (IMA) suggests that the appetite to invest remains.

Around two thirds of UK investors plan to add to their investments in the coming months, while just one in five are considering withdrawing money.

Unsurprisingly, the survey uncovered a drop in confidence compared to six months earlier.

However, when it came to investors' intentions for the next six to twelve months, an air of positivity was shown to remain overall.

"Our survey suggests that UK investors are far from panicking," said Richard Saunders, chief executive of the IMA.

"This is borne out by our sales statistics, showing that investors have carried on adding to their portfolios even at a somewhat reduced rate over the summer."

As to where investors expect to entrust their money in the near future, equities are still in favour, although it is anticipated that commodities will produce the best returns.

Indeed, it appears that investor appetite for risk remains relatively undimmed, with around half of those planning to take out a new product in the next twelve months intending to invest in equities, even though only 6% consider it to be the least risky asset class to invest in.

Just over a quarter said they will invest in fixed income products, while around one in six plan to invest in commodities.

"Often we hear about retail investors pursuing a herd mentality, buying at the top and selling at the bottom," added Richard Saunders.

"But our findings suggest a stalwart investor committed to saving for the long term, despite market volatility.

"Almost half intend to invest in the stock market in the coming months."

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