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.