Half of the general public are most threatened by rising food and energy prices, with only 13% citing recession as their primary financial concern, according to the AIC.
A further 8% are most worried about the effect of the credit crunch on their investments, found The Association of Investment Companies’ (AIC) research.
The findings contrast sharply with six months ago when a quarter feared a recession, it says.
Mirroring sentiment, 29% of active investors’ primary fear is food and energy prices fuelling inflation, with 22% most concerned about the possibility of a recession and 10% about the credit crunch.
These concerns have affected the way people manage their money, with 35% of active investors and 23% of the public decreasing their spending and saving more.
However, 56% of active investors and 31% of the public have not changed their spending and saving habits.
Approximately a third of active investors plan to increase their investment in the next few months, a decrease from 38% in March. However, 80% of investors planning to up their holdings see buying opportunities created by recent market falls.
The number of investors sitting tight on their investments is up to 44% from 36% in March, a third of whom believe the stock market is still too uncertain after recent falls. Of nearly 20% of investors planning to decrease stock market holdings, a third consider it is because the credit crunch is having an adverse effect on markets.
Research also found the UK’s love affair with property is over. Just under half of investors believe equities will produce better returns then the UK housing market, compared to 2% who back the housing market. Approximately 40% think they will perform as badly as each other.
It also revealed blue chips are perceived as the safest haven by active investors. Approximately 20% of investors cited it as their favourite sector, closely followed by resources, with a 16% share; a reverse of the March situation.
The UK remains investors’ top investment destination, commanding 67% of money invested, while the popularity of emerging markets tumbled 2% from 10% in March to 8% in September.
However, green investing is still on the agenda for 55% of active investors, demonstrating the long-term appeal of global warming as an investment theme, despite market volatility.
Annabel Brodie-Smith, communications director at the AIC, says: “While none of us can be sure of the market’s next move, in the past bold contrarian investors have been rewarded over the long-term for investing in equities when confidence was at a low.“IFAonline
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