If you want an illustration of how difficult the environment has become for share investors, consider the fact that US stocks have now underperformed bonds not just in the short term but in the past 30 years, which is something they haven't done in any other 30-year period since the start of the American Civil War. That's right - since 1861. ..................................... Do Australian investors, like Americans, increasingly fear equities?
The annual InvestSMART Funds Flow Survey released last week found that sharemarket volatility has sent many Australian investors onto the sidelines or into more conservative asset classes in the past two years.
The survey of 1540 "self-directed" investors using the online discount fund broker's service found there was a 19 per cent decrease in share holdings between 2009 and this year but also a 35 per cent fall in cash holdings. Fixed interest was a significant benefactor (up 85 per cent), along with property holdings (up 37 per cent).
There was a 110 per cent increase on last year in the number of respondents who rated the current market as bearish.
Another indicator might be how much money is being kept in cash by self-managed super fund trustees.
Researcher Investment Trends, as part of its annual SMSF Investor Report, found that total cash held by SMSFs grew by $40 billion between the publication of its reports in May 2009 and this year, an increase of 54 per cent.
