Investors favour low-risk strategies amid economic uncertainty
Almost two thirds of investors plan to adopt a low-risk strategy for their portfolios over the next 12 months, amid mixed views of the UK’s economic outlook.
A survey commissioned by property investment platform Shojin found that 57 per cent of UK investors think the worst of the economic turbulence from the past 18 months has now passed.
Furthermore, 43 per cent said they were confident that interest rates will come back down next year, suggesting that inflation will have been brought under greater control.
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Shojin commissioned a survey of 964 UK investors, all of whom have investment portfolios worth in excess of £10,000 in addition to their savings and home.
48 per cent said that their investments performed well despite economic headwinds, compared to just 12 per cent who said they performed poorly.
However, only 39 per cent of UK investors said they are currently optimistic about the state of the UK economy, with 62 per cent saying they are worried about the government’s handling of it.
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As a result, 62 per cent plan to adopt a low-risk investment strategy over the coming 12 months, while just 23 per cent will take a high-risk approach.
“It’s clear from our data that the government still has its work set out to allay the concerns of UK investors when it comes to their ability to manage the economy,” said Jatin Ondhia, chief executive of Shojin.
“Yet, amidst these concerns, it is positive to note that many investors believe we are through the worst of the economic turbulence, and there is evidently confidence that interest rates will fall next year.
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“The fact that 48 per cent of investors – a higher figure than many would have expected – said that their investments performed well this year, highlights that many have been proactive in adapting their investment portfolios to the challenges presented by high inflation and higher interest rates.
“Ultimately, while the government has plenty of work ahead in regaining the trust of investors, there is a sense that 2024 will bring a little more calm and predictability than the past three or four years. That said, investors must continue to be proactive, exploring all the different options available to them, and assessing which of those options best suit their risk appetite and long-term goals.”