Private investors shied away from equities in October and November, pouring in just £36m compared to £1bn in the previous two months.
Capita Registrars research revealed investors were highly active during August and September, but net trading and two way trade fell sharply as market uncertainty continued.
Private investors owned shares worth £214bn at the end of November, an 11.1% share of the overall market.
Capita director John Roundhill says private investors “hate trading” in volatile markets.
“When stock prices gyrate wildly, they tend to sit tight,” he says.
“They courageously exploited market weakness in the summer, even buying financial stocks at the height of the confusion surrounding the onset of the credit crunch, but have been reluctant to commit more capital to equities through the autumn.”
Capita research also revealed private investors turned against defensive stocks to those which should benefit from falling interest rates.
“This is not a wholesale shift from defensive to cyclical shares, but this is nevertheless a dramatic turnaround in private shareholder investment strategy following more than a year of very defensive play,” Roundhill says.
“It’s pretty brave considering the current uncertainty over the economy.”
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