Investor pessimism soars to three-year high as gold becomes second favourite asset class
Investors are at their most pessimistic for nearly three years, according to survey data released today.
Lloyds Bank Private Banking’s investor sentiment index dropped to a score of 2.98 per cent this month. The score is compiled from the views of nearly 5,000 adults including 1,123 investors. The index is at its lowest level since May 2013.
The index has been driven down by the fact sentiment toward UK shares is at its lowest since March 2013. The FTSE 100 is down 4.5 per cent since the beginning of the year.
Optimism on shares in the US fell to its lowest since November 2013 while sentiment toward shares in Japan and emerging markets also declined from January to February.
Eurozone shares were viewed more positively despite losing 7.9 per cent of their value over the last month.
UK government and corporate bonds lost favour among investors while Gold saw a big bump. The yellow precious metal is now investors’ second favourite asset class behind UK property.
“This is a time for calm heads and careful research,” said Markus Stadlman, chief investment officer at Lloyds Bank Private Banking.
“Now more than ever, identifying buying opportunities in the equity market requires a deep understanding of company valuations and how markets work.”
“What’s more, both the understanding of risk, and the appetite for it have changed. It is notable that some investors seem to be adopting an increasingly negative attitude even towards lower risk assets, such as government bonds, which have seen performance improve in the last month. This shows the current levels of uncertainty among investors.”