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Investors getting feelgood factor

Investors getting feelgood factor

Category: Investments

Updated: 26/10/2009
First Published: 26/10/2009

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 It is now over 6 months old so the content may be out of date.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 feelgood factor seems to be returning to investors after new research revealed confidence amongst active investors had jumped to its highest level in three and a half years.

According to the Association of Investment Companies (AIC), some 52% of active investors said they planned to increase their stock market exposure over the next few months, a considerable leap from 33% in September last year and 2007 and the highest level seen since February 2006.

In terms of the future, 62% of active investors expected equities to outperform property over the next year, the highest since February 2005 (71%).

Encouragingly, of the nine per cent of investors who said they were decreasing their stock market exposure, over a quarter are taking profits resulting from the recent rally.

Meanwhile, optimism is also said to be growing amongst the traditionally more cautious general public, who are at their most positive regarding the stock market since AIC records began in 2004.

Momentum is also building over the prospects for both the stock market and the UK housing market.

Some 19% of the general public think equities will outperform the housing market over the next year, the most positive reading since records began, while 14% believe both will make good returns, compared to just 3% back in February.

"Clearly the recent market rally has helped investors put the market turbulence of the last 12 months behind them," said Annabel Brodie-Smith, AIC communications director.

"It's encouraging to see investor confidence surge amongst both active investors and the general public. Certainly those investors who had the courage to invest earlier in the year will have been well rewarded."

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