A return to positive territory for investor confidence for the first time since the global financial crisis began in August 2007 could reflect nervous optimism, according to the Investment and Financial Services Association (IFSA) CoreData Investor Sentiment Index.
The index indicates that investors want to believe that things will be better, but their confidence is fragile.
“We need to record another positive quarter in the third quarter of this year before we can have confidence that sentiment is truly returning to positive territory,” CoreData’s head of market intelligence, Craig Phillips, said.
The latest quarterly index recorded a measure of 2.3 for investor confidence (on a scale of -100 to 100), up from -22.3 in the first quarter of last year.
The rise in confidence was driven by a fall in negative outlook towards investment markets over the next three months, a slight rise in financial security and a rise in the intention levels of investors over the forthcoming three months, according to the index.
“This latest survey shows that people are starting to look for opportunities. The investors surveyed have some experience and have probably been through a couple of market downturns. They know that when the tide turns, sometimes it can do so quickly and that if you are not in the market, you can miss out on some significant gains,” IFSA deputy chief executive John O’Shaughnessy said.
Managed funds are an easy way of accessing a range of asset classes where your investment dollar can go further while unit prices are down, according to O’Shaughnessy.
“I suspect we might see more and more investors ‘drip-feeding’ or dollar-cost averaging as a strategy between now and the next survey,” O’Shaughnessy said.
