October sees improved investor sentiment
New research suggests investor concern levels are falling, but this might not necessarily translate to good news, according to Investment Trends senior investment analyst Recep Peker.
Investment Trends' monthly Investor Intentions Index from October shows improvements in consumers' fear levels, but their long-term market return expectations remained depressed.
According to the report, investors expect the market to grow by only 18 per cent in the next five years, which equates to a little over 3 per cent annualised growth.
"This is showing that investors have become desensitised towards all the volatility and bad news; they are used to things like fiscal cliffs and debt crises, and now see these as part of the norm," Peker said.
"One consequence arising from this is that lower concern levels have not translated to better return expectations, which makes the life of everyone in the wealth management industry that much harder, especially for those who have transactional relationships, but also provides opportunities for those who take a more holistic approach to managing their clients' wealth."
Interestingly, investors have started to see more value in small cap stocks and bluechip stocks, but have lately labelled US stocks as overvalued, while seeing resource stocks to be at fair value. Despite recent reductions in official cash rates, the propensity to hold and accumulate cash remains high.
Recommended for you
Sharing his reasoning in joining the FSC board, WT Financial chief executive, Keith Cullen, believes “product and advice cannot be separated” from each other in the current environment.
The Emerge Foundation, a charity run by financial advisers and fund managers, has announced a scholarship program to help veterans transition into tertiary education.
In an open letter, Sequoia chief executive Garry Crole has hit out against shareholders “with a personal axe to grind” as he fights for his job ahead of an EGM.
The JAWG has announced it is in talks with Treasury around five “core principles” to strengthen the education standards for new entrants to the financial advice space.