Still Confidence in the Stockmarket

Article excerpt

Byline: Meurig Phillips

IN LIGHT of the continuing conflict in Afghanistan, the world's stockmarkets appear to be showing surprising resilience. However, only the very brave (or foolish) would suggest that a full stockmarket recovery is under way.

It does appear that currently investors, unlike previous stockmarket corrections, have refrained from panicking into selling their investments. A survey from the London Stock Exchange (LSE) suggests that private investors are holding on to their shares and biding their time. The survey conducted by researchers Mori on behalf of LSE found the majority of private investors had bought more shares than they had sold over the last 12 months and only 26 per cent of all shareholders had sold shares over the past year.

Chris Broad, of LSE, stated: "It was encouraging that their [investors] confidence in the stockmarket as a long term investment has not diminished." (Source: Money Marketing, 18 October 2001).

It therefore appears that many investors are sitting tight to ride out current market conditions. However this should not detract from reviewing other aspects of your financial planning.

Whilst a stockmarket crash can have a detrimental effect on your pension and savings, in the long term, investments tend to recover. …