…… those with a financial adviser are more likely to invest. These were among the findings of CoreData Consulting’s Investor Sentiment Research Report for the fourth quarter of 2012.

The report, which reviews investor sentiment towards business, economic conditions and asset classes, found investor sentiment in Q4 2012 increased to minus 7 from minus 9.7 last quarter – the highest sentiment indicator in the past 18 months.

Other highlights included the proportion of respondents who believe that the economy will grow at a slower rate in the next quarter, falling to 47.5 per cent from 52.1 per cent. However, this still represents the largest group of respondents.

Report respondents were polarised about the prospects of their household financial positions in the coming 12 months, with 29.5 per cent believing it will worsen, 35.5 per cent believing it will remain stable and 34.9 per cent believing it will improve.

The Investor Intention Index rose from minus 24.3 to minus 20.2 in Q3, but still remains firmly in the red, suggesting that while sentiment has improved, investors are not yet willing to back their instincts.

Generating income stream is the most popular goal for investments (35.3 per cent), followed by income on capital before principal is needed (24.1 per cent), capital growth with no need for income (20.1 per cent), maintaining capital (16.4 per cent) and achieving high capital growth (4.1 per cent).

A total of 817 respondents participated in the survey, which was carried out between November 15 and 27, 2012.

While the research found that half of respondents’ households (50.7 per cent) are saving, similarly to Q3 (49.1 per cent), more than one in five households (20.6 per cent) are running into debt or having to draw on savings while 28.7 per cent are just making ends meet on their incomes, reflecting the continued polarisation across the country.

Respondents with financial advisers were slightly more likely than those without to invest in an existing investment (27.1 per cent versus 25.1 per cent) or invest in a new investment (15.2 per cent against 13.5 per cent).

Roughly the same proportion of the advised (23.7 per cent) and unadvised (23.9 per cent) are likely to withdraw money from existing investments in the next three months.

Andrew Starke
14th January 2013
Source:  Professional Planner    http://www.professionalplanner.com.au