UK investors adopt cautious approach to investing

UK investors have become increasingly more cautious towards investing amid overall uncertainty about the economic recovery.

More than 50 per cent of investors believe the economy is still in a recession, according to a new investor confidence survey by TD Waterhouse. A further 45 per cent say they have adopted a more careful approach to investing.

Many are also relying less on IFAs to help them to choose where and when to invest with more than half of UK investors now making their own investment decisions compared with 19 per cent who depend on the advice of their adviser or broker.

But individuals are still optimistic about equities and the majority of those surveyed said they were satisfied with the performance of their portfolios which are up, on average, by 16 per cent from a year ago.

“It is interesting to note the mixed views regarding the shape of our economy and it is clear that many investors do not think we are out of the woods just yet,” said Angus Rigby, CEO of TD Waterhouse UK.

“The general tone from our respondents this year seems to be cautious optimism coupled with a desire to take control of their investment decisions.”

UK companies remain the most popular choice among UK investors, with 85 per cent devoting a large proportion of their portfolio to this sector, while 37 per cent favour international companies as their second choice.

Banking sector stocks ranked among the best and worst performing investments over the past 12 months, though 35 per cent of UK investors predict the sector will rebound in the next few months.

Investors remain partial towards the health care and commodities industries. Nineteen per cent expect precious metals and energy to perform the best, followed by the Asian, UK and European stock markets.