By Jenne Mannion The UK retail investor's confidence is at a 12-year high but there is no sign of a ...
By Jenne Mannion
The UK retail investor's confidence is at a 12-year high but there is no sign of a forthcoming stock market crash.
These were the results of the Hargreaves Lansdown Investor Confidence Index, which tracks the attitudes of the group's client base.
Peter Hargreaves, managing director at Hargreaves Lansdown, said: "Although investor confidence is at the highest since 1987, we do not expect that a crash is around the corner.
"Anyone who can remember the late 1980s will remember that in 1986, the stock market had good year and investor confidence was high.
"After Margaret Thatcher announced the general election in the spring of 1987, confidence was dented but her victory sent the markets soaring - we are not at this stage yet. This year is more like 1986 but this does not suggest that we feel that a stock market crash is a year away.
"Our own market has underlying strengths which leads us to feel bullish about it, but the UK market, like all other stock markets, is completely dependant on Wall Street remaining resilient."
The survey covered 250 investors and was conducted in November 1999. A question which asked about the likelihood of the UK stock market being at a higher level found 19% considered it 'very likely' over the next six months while 27% thought it 'very likely' in the next 12 months and 46.6% said three years.
For those who felt it was 'likely' to rise some 44.8% thought this would be the case over six months, 55.2% thought this over 12 months and 40.5% over three years. Only 9.5% felt it would be 'unlikely' over the next six months while 6% said this was 'unlikely' over the next year and 2.6% over the next three years.
Even less - 0.9% over six months and three years, and zero over the next year - thought it was 'very unlikely' that the UK stock market will be at a higher level. Most people surveyed expected interest rates would be higher than they are today, with 79.3% saying this is likely over the next six months, 73.3% saying over the next year and 34.5% over the next three years.
The research found 92.2% of investors surveyed held shares, 54.3% of investors had an Isa, 71.5% held a unit trust, 42.2% have investment bonds and 61.2% hold investment trusts. Meanwhile, some 39.7% had pension plans, 52.6% had National Savings and 92.2% had a building society account.
Hargreaves said: "Nowhere is investor confidence more manifested than in the stock market, where volumes are at an all time high.
"Even in the area of collective investment, we are seeing a record number of transactions, even greater than the previous records of 1987, and, despite the unit trust industry's claims that the Isa is too complicated, it is selling better than Peps ever sold in the period between the end of the tax year and Christmas."
The survey also found only 16% had concerns about investing before 31 December 1999 for millennium bug-related reasons and more than 70% will make an investment between now and the end of the tax year on 5 April.
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From 6 April 2019