Reduction of investment risk by achieving a balanced spread of assets is a sign that investors are listening to good financial advice in the recession, according to the latest research from the Investment Management Association (IMA)*.
Investors have gradually reduced the risk in their investment portfolios over the decade to date, with sales of equity investments falling to 49% of total sales (from 79% in 2000) and bond investments rising to 29% (from 11% in 2000).
Equities have had a choppy time in the past three years, topping the popularity league in 2007, but then coming in as least popular asset type in 2008.
Now they appear to be rallying, however, as equities have outsold bonds in October and November, indicating that investors are beginning to take on a little more investment risk as the year comes to an end.
While new investment in Individual Savings Accounts (ISAs) was down this year (£2.3bn of new savings compared with £7.2bn in 2000), ISA investors also showed the same marked tendency towards diversification over the decade, according to the IMA.
The IMA’s director of markets Jane Lowe said: “This may indicate that advice, guidance and investor protection are central to consumers when investing and can provide a degree of stability in times of market stress.”
*Source: Retail Investor Trends, IMA, December 2009
