UK investors more confident

Six out of ten regular investors in the UK stock market those who trade at least once a month are more confident than they were 12 months ago, according to new research from broker, TD Waterhouse. Over 75% of UK investors expect to see their investments make strong progress in 2007.

While past performance may not be a guide to the future, the survey found that confidence tends to be based on experience. The most commonly given reasons for confidence in the UK market all relate to historical growth, with 26% of investors citing the recent strong performance of the FTSE and their own portfolios.

Looking back over 2006, 7 out of 10 investors claimed to be satisfied with the performance of their portfolio. This figure rises to 8 in 10 for the regular trader group. Less than 1 in 10 expressed dissatisfaction.

Amongst those who said they weren't confident in the UK stock market over the next twelve months political uncertainty was the factor most widely referenced. When looking at all investors, 56% said they weren't confident in the political climate.

The importance of the internet to retail investors featured prominently in the results, with the majority 57% of respondents saying they use online resources to help with their decision making. The financial press and specialist magazines were in second place, cited by 41% of respondents, while advice from friends and family or from a financial adviser, were equally important at 30%.

The research also revealed a number of interesting facts about the investment trends and portfolio structures of the UK investing public.

78% of respondents, for example, said that they hold shares in UK companies, with 29% holding shares in international companies rising to 45% amongst regular traders.

Meanwhile, 29% of respondents said they hold some form of collective fund, e.g. a unit trust/investment trust. 34% of investors currently hold shares in the Financial Services sector, followed by 27% in Retail, 20% in Drugs and Healthcare, and 19% in Telecommunications. All three sectors were predicted to perform well in the coming months.

Tesco was singled out as the company most investors would like to put their money into with 11% naming the supermarket giant. BP 4%, M&S 4%, Standard Life 3% and BT 3% were the next most popular.

Despite the confidence shown in the stock market, the survey found that investors still have the highest faith in UK residential property over the next few months. A total of 57% expect UK residential property to be the strongest performing investment class, closely followed by the UK stock market, Asian stock markets and UK commercial property all at 45%.

In contrast, the US stock market seems out of favour with just 23% of investors expecting it to perform well in early 2007.

Moneyextra.com recommends you take independent financial advice before acting on any article

2006-12-05 10:16:23 © Moneyextra.com