Investors waiting to pounce

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New research has revealed Aussie investors are reducing their exposure to risk in the current share market in favour of keeping their cash right where they can see it – in the bank.
 
In the newly released September Investor Sentiment Survey, the Australian Investors’ Association and FNArena found that investors were in no hurry to invest in the volatile share market, with many would-be investors expecting a further downturn in the next six months.
 
However, with cash sitting idle in bank accounts, many investors are simply biding their time on the sidelines of the market, and some believe the time to pounce on well-priced and high-dividend paying stocks is already here.
 
Yet on the whole, the general investor outlook remains bearish as demonstrated in the following table which shows investor sentiment survey responses throughout 2011.
 
 
 
Bullish
Neutral
Bearish
January
31%
54%
15%
March
21%
52%
27%
May
11%
55%
35%
July
6%
46%
48%
September
7%
38%
56%
 
 
Indeed FNArena noted that for the first time, Australian investors had an mostly negative view on where the share market is likely to be in six months’ time (40% answered negatively), while just 31% answered positively.
 
However, a large number of participants expressed their belief that Australia’s solid economic fundamentals and cheap valuations for local equities will prove a beneficial combination in the longer run.
 
And if you’re in the positive camp, you may see bargain prices on blue chip shares as your chance to break into the market.

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