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Nervy investors shy away from equities

Nervy investors shy away from equities

Category: Investments

Updated: 22/06/2010
First Published: 22/06/2010

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 It is now over 6 months old so the content may be out of date.
The recent volatility in the stock markets has once again sent investors running for cover.

Confidence amongst investors seemed to be returning at the start of the year, as markets continued to make steady upwards progress.

However, the latest research from Capita Registrars suggests investors have recently been turning their backs on equities, as nerves set in once more.

Although the FTSE All Share index ended May just 2.5% lower than at the end of February, the index swung dramatically up and down during that period.

The report also found that investors bought and sold more shares in those three months than at any time in the last three years.

The anticipated changes in today's Budget regarding capital gains tax are thought to have played their part in this surge in activity, with many investors looking to take their gains before the rate increases or the threshold is reduced.

"Speculation about changes to capital gains tax has left investors confused about how best to plan their affairs," said Justin Cooper, chief operating officer at Capita Registrars.

"An increase in the capital gains tax rate will only affect a small number of wealthy investors. But significantly reducing the threshold will bring many millions of ordinary savers into the CGT net for the first time too."

Although the potential for greater returns is available through stocks and shares investments, the danger always exists that money could be lost too.

People who prefer not to take risks with their money are usually urged to consider savings accounts such as cash ISAs and fixed rate bonds.

Amongst the best three year fixed rate bonds currently available are accounts from ICICI Bank paying 4.15% and from Lloyds TSB paying 4.10%.

For those who would prefer a shorter fixed term of one year, Barnsley BS is offering a fixed rate bond paying 3.00%.

Find the best savings rates for you - Compare savings accounts

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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