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Investors expect prolonged downturn

Investors are braced for the global downturn to last another two to five years, according to a survey by F&C.

On March 6 the group surveyed 786 self-directed private investors in investment trusts.

The responses showed almost nine out of 10 investors expect a recovery in the global economy and financial markets in the next five years. Only 11% predict a recovery within one year, but 37% expect a recovery in two years and 39% in three to five years.

Despite this pessimism, the vast majority of respondents (94%) said they would not be selling their investments because of market conditions, and 60% said this is a good time to invest in equities.

In contrast, 8% said this is a bad time to buy equities. One-third (32%) of investors said they did not know, which F&C says reflects uncertainty in the market.

However, many investors have reduced their expenditure as a result of the credit crisis.

The survey found 47% of investors had cut their spending, but half said economic conditions had not had any effect on their spending.

Asked what they would do with their investment contributions, 58% said they would remain the same, 23% said they would invest less, or less frequently, and 19% planned to increase their contributions.

The survey also questioned people on their attitudes to the British government’s intervention in financial markets. Over half (54%) were broadly supportive of the fiscal stimulus measures, while 29% said more should be done and 17% said less intervention was needed.


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Light in the East

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