Published on : Fri, 18 Nov 2005 15:04GMT
by : Lucy Andrews

Private investors are now treading cautiously on the stock market arena. In fact, fewer people are now planning to invest freshly in equity. The news is not dissimilar on the property front too, as investors confidence levels are low about returns from property through house prices even as house prices seem to be stabilising.

A survey by the Association of Investment Trust Companies (AITC) on active investors found that 58 per cent expressed more optimism on shares than property. However, this is down from 71 per cent in February. Persons planning to venture into the stock market were down from 58 per cent to 44 per cent over the same period. The association said: “This year’s stock market rally seems to have made active investors jittery rather than jubilant.”

Twenty per cent mentioned fragility of the economy as the reason for exercising caution in share market, while 19 per cent attributed it to “taking profits”. Eleven per cent of equity investors were planning to dispose off some shares.

For 25 per cent of the active investors, property was still too expensive, which is up from 20 per cent in October 2004, while 13 per cent are worried about a collapse in property market.

Thirty per cent of the populace felt bricks and mortar were the safest bets over the next one year as against 46 per cent in February 2005 and 56 per cent in October 2004.

According to AITC, about 30 per cent of UK citizens still expect house prices to produce better returns than shares over the next 12 months, which is down from 40 per cent in February.

“We believe the repeated warnings about a property slowdown are beginning to have an impact but it's a concern that many people are still banking on property prices rising,” said Annabel Brodie-Smith, communications director of AITC.

The AITC said that though people find ups and downs in stock market to be disconcerting, they need to remember that equity investment should be for the long term like five to ten years before shares and investment trusts usually surpass bank and building society accounts. It added: “Investment trusts are a good way to gain access to the stock market and have performed strongly over the last ten years with the average investment trust up 118 per cent.”