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Investors get the jitters

Only 44% plan to increase their stockmarket exposure

Private investors are less confident in the stockmarket than they were earlier in the year with less than half planning to increase exposure to equities, according to the Association of Investment Trust Companies.

The AITC found that only 44 per cent of active investors plan to increase their stock-market exposure – a drop of 14 per cent from February’s 58 per cent.

This year’s stockmarket rally seems to have made active investors jittery about the market rather than jubilant, says the AITC.

Some 20 per cent of active investors are planning to decrease their stock market investments because they had “concerns over the fragile economy” and 19 per cent want to take the profits they have made. Brodie-Smith: ‘Confidence was knocked during October’Despite their concerns, 58 per cent of active investors still expect equities to outperform property over the next 12 months, 24 per cent think property is still too expensive and 13 per cent express concerns of a crash in the market. Of the general public only 33 per cent feel property is the safest option for their money, down from 56 per cent in October 2004.

The research was conducted among 4000 people, half of whom are active investors.

AITC communications director Annabel Brodie-Smith says: “The proportion of the general public believing property will outperform the stock-market over the next year has been consistently falling. Markets have rallied in recent weeks but this index completed before Halloween’s merger Monday shows active investors’ confidence was knocked by the stockmarket’s tough ride during October.”

Hallmark managing director David Holbrook says: “The results of the survey lead me to question its validity. Both anecdotally and in my hands-on personal experience I would say investor confidence has been steadily returning through the year. It is a surprise to me that the numbers reveal otherwise.”

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