Confidence in stock market improves
People’s confidence in the stock market is improving, with eight out of 10 UK investors saying it is the best place to put their money, according to research today.
Around 61% of investors said they now felt more confident about shares than they had 12 months ago, while just 16% said they were now less confident, according to broker TD Waterhouse.
Seven out of 10 people who invest in shares said they expected the FTSE 100 Index to be higher than it is now in a year’s time, more than half of whom expect it to rise by up to 10%, while just 4% of people are predicting a fall.
Just over half of investors said they thought shares were currently undervalued, while 22% predicted the positive economic outlook would drive prices up.
But investors are less confident about the prospects for property, with 51% saying they expected shares to outperform all other types of investment over the coming six months, compared with just 28% who said the same about property.
Three out of 10 people also said they expected property to be the worst performing investment over the next six months.
Angus Rigby, senior vice president of TD Waterhouse, said: “Despite several years of poor stock market performance, investors are optimistic about prospects for the coming months.
“With two out of three investors telling us that they are more confident now than they were 12 months ago, and 70% expecting the FTSE 100 to rise over the reminder of 2004, it seems that the stock market is back in favour.”
Around 83% of people said they put money into the stock market because it offered the best opportunities for growth, while 17% said they invested purely for fun, finding it more interesting than other types of investment, and enjoying the thrill and the opportunity to use their intelligence.
Going forward people expected shares in financial services companies to perform best over the coming six months, with a quarter of investors expecting these to be the strongest shares, followed by 14% who favoured retail and leisure companies and 12% who liked either property firms or energy and mining companies.
Newspapers were seen as the most important source of information by investors, cited by 77%, while 33% said they relied on tips, and 22% said they acted on impulse.
:: Synigence questioned 200 people with at least £5,000 (€7,500) invested in shares by telephone during June.
