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Investors search for cash options

Investors search for cash options

Category: Investments

Updated: 22/01/2010
First Published: 12/01/2010

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 It is now over 6 months old so the content may be out of date.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 planning to invest less in 2010 after a drop in confidence in the stock market, the latest research from the Investment Management Association (IMA) has revealed.

With the recovery in the markets recently pausing for breath and uncertainty about the prospects for the economy, expectations of further strong investment returns have been dampened.

Appetite for risk has also dropped, particularly amongst older, wealthier investors. More than twice as many investors plan to be more rather than less cautious in the coming months, while those planning to keep additional cash in savings accounts outnumber those with more adventurous plans by four to one.

However, despite a greater desire to seek the safety of cash, investors were found to be frustrated by the low returns on offer from cash accounts.

More than half said they had found it more difficult to find a good place for savings.

"Investors are clearly frustrated by the poor returns available on cash but at the same time are cautious about taking on more risk," said Richard Saunders, chief executive of the IMA. "Older people in particular want to protect their capital and maximise the income from their savings, and are finding it hardest of all."

For those still willing to invest, equities and residential property were found to be the most attractive type of asset, although equities was the only asset class deemed less attractive than six months earlier.

Commodities and commercial property enjoyed the biggest rise in sentiment.

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