Investor sentiment slumps to GFC levels

Investor sentiment has taken a dramatic fall in the third quarter of 2011, dropping to the lowest level since the first impact of the global financial crisis, according to CoreData.

CoreData has released its Investor Sentiment Research Report, which found investor confidence was sitting at negative 21.7 - a drop of 15.7 points from the previous quarter.

The survey, which involved 820 participants, also revealed one in four Australians were struggling financially, with 15 per cent drawing on savings and 11 per cent running into debt to make ends meet.

CoreData's head of advice, wealth and super, Kristen Turnbull, said investors were shaken by the recent US and European debt crisis and are concerned over the fallout of economic uncertainty.

"80 per cent of respondents predict an economic slowdown over the coming quarter; investors have become much more negative about business conditions, with 68 per cent expecting them to deteriorate - up from 44 per cent last quarter," Turnbull said.

The report also found that investors without a financial planner were more likely to invest more money into an existing investment (23 per cent) than those with one (17.5 per cent).

All investments - apart from residential property - are expected to perform worse in the next three months, according to the survey.