• 40% of investors are planning to invest more in 2020 than this year
• Investors think UK, US, Asia, Japan and Emerging Market stock markets will end 2020 up
• Europe is the market investors are most negative on
• Technology is the favourite sector for investors for 2020
• Investors are more confident about their portfolio next year than 12 months ago
• Those ramping up cash are preparing for a market dip
Laura Suter, personal finance analyst at investment platform AJ Bell, comments:
“Investors are brimming with positivity for 2020, as they plan to invest more than they did this year, think most main equity markets will rise and feel more confident about the outlook for their investment portfolio. The looming final Brexit negotiations, worries about trade wars and potential impeachment of the US President haven’t dampened investor spirits, who are heading into the New Year with a rosy outlook for the next 12 months.
“When questioned, 40% said they plan to invest more money next year than they did in 2019, while another 50% will maintain investments at the same level. What’s more, the majority of investors think that the UK, US, Asia, Japan and Emerging Market stock markets will end 2020 higher than they are now.
“Of particular interest to investors was the technology sector, which they pinpointed as an area they plan to commit money to, with more than three in five respondents planning to invest in tech next year. This comes after a booming year for technology stocks, which investors clearly expect to continue.
“Many people sold UK equity funds this year, with the funds seeing almost £3bn of outflows in the year to the end of October, according to Investment Association figures, which was largely blamed on political uncertainty. This hasn’t swayed many investors though, with almost a third saying they have increased their exposure to UK domestic companies in 2019, with just a fifth of people decreasing their allocation – the remainder kept the exposure the same.
“Investors’ enthusiasm is spread across the globe, with more than two-thirds of people planning to invest more in the UK stock market, while 55% will invest more in Asia and emerging markets. On the flip side, Europe is out of favour with investors with most people thinking markets there will fall over 2020 and almost two-thirds planning to invest less next year.
“There’s a real divide in whether customers are ramping up their cash levels, with 47% increasing cash while 53% aren’t. Those making the dash for more cash are either preparing for a market dip, or have reservations about when to enter markets. It’s notoriously tricky to accurately time markets – even the professionals struggle to do it consistently – so these investors might be better gradually drip-feeding their money into markets rather than attempting to jump in at exactly the right point.”
Research conducted online with 1,427 AJ Bell Youinvest customers during November 2019.
Responses:
Are you planning to invest more or less next year compared to 2019?
|
More |
40% |
|
Less |
13% |
|
The same |
47% |
Do you think stock markets will finish 2020 higher or lower than they are now?
|
Sector |
Higher |
Lower |
Not sure |
|
UK |
870 |
325 |
232 |
|
US |
590 |
506 |
331 |
|
Europe |
418 |
592 |
417 |
|
Asia |
673 |
293 |
461 |
|
Japan |
601 |
268 |
558 |
|
Emerging markets |
683 |
265 |
479 |
How confident are you feeling about the following investment types for 2020?
|
Investment |
Rating (0 - no confidence, 10 - extremely confident) |
|
Equities |
6.23 |
|
Government bonds |
4.85 |
|
Corporate bonds |
4.94 |
|
Property |
4.94 |
|
Cash |
4.66 |
|
Gold |
5.51 |
In relation to stock markets, are there any particular sectors you intend to invest in next year?
|
Sector |
% |
|
Technology |
60.3% |
|
Infrastructure |
46.7% |
|
Utilities |
26.3% |
|
Consumer goods |
24.2% |
|
Banks |
23.3% |
|
Insurance |
19.4% |
|
Mining |
18.6% |
|
Oil |
13.4% |
|
Retail |
7.4% |
Have you reduced or increased your exposure to companies (either directly or via funds) that earn revenue in the UK in 2019?
|
Increased |
32% |
|
Decreased |
21% |
|
Stayed the same |
47% |
Next year, do you intend to invest more or less in the following stock markets than you did in 2019?
|
Sector |
More |
Less |
|
UK |
899 |
421 |
|
US |
556 |
644 |
|
Europe |
419 |
704 |
|
Asia |
613 |
502 |
|
Japan |
484 |
607 |
|
Emerging markets |
618 |
506 |
Have you been increasing the level of cash in your portfolio?
Yes: 47.2%
No: 52.8%
If yes, is this:
In preparation for a market dip: 54.9%
Due to reservations about entering markets: 29.7%
How confident are you about the outlook for your own investment portfolio in 2020? (0 - no confidence, 10 - extremely confident)
|
Average for 2020 |
6.29/10 |
|
Average for 2019 |
5.69/10 |
