Irish investors remain gloomy about the outlook for the Irish economy according to results of our most recent RaboDirect Investor Barometer which shows that 85% of respondents are pessimistic about the economy’s prospects over the next 12 months. The survey of Irish investors also reveals that confidence in the global economy has held up with 58% of investors suggesting they have a positive outlook for the world economy over the next year.

The barometer reveals that 68% of investors are optimistic about their personal financial situation, down 3% from last quarter, but an encouraging figure nonetheless. There’s also been a clear shift in sentiment away from shares with 29% of respondents indicating that shares are their preferred asset class in the current market (down 16% from last quarter). This is reflected in a return to the relative safety of cash and bonds with 48% of investors indicated a preference for cash (up 11%) while 19% of investors indicated a preference for bonds (up 2%).

66% of respondents think there’s value to be found in global stock markets (down 11% on last quarter), 41% expressed the view that returns of 5% are achievable over the next 12 months and 26% believe returns of 10% plus are within reach. Emerging economies still attract the greatest interest with 33% of investors indicating they would consider investing in emerging markets. Interest in the US has fallen to 14% (down from 23% last quarter) while interest in investing in the EU has increased to 26% (up 6%) and in Asia to 28% (up 6%).

My own personal view is that investors have become more sophisticated since the financial crisis and are showing greater caution when it comes to how their investments are managed. They’re increasingly taking investments decisions into their own hands and rejecting the traditional advice investment model as they’ve repeatedly lost money. Today’s results reflect this new environment with 39% of investors ranking honesty and transparency as the most important factor when choosing an investment provider. Costs and fees are also very important with 38% of investors ranking this as their biggest priority.

Not surprisingly, confidence in the Irish property market remains extremely low with 85% of respondents indicating they were pessimistic about this market over the next 12 months. This negative sentiment is not reflected to the same extent when investors look outside Ireland, with 30% expressing their confidence in global property (up 9% on last quarter).

As ever, we’d like to thank everyone who took the time to complete our Investments Barometer. It’s great for us to get a better understanding of how you feel about the markets  and use it to see where that might take your portfolio and our offering in the future.

Note: This research is based on a total of 521 respondents.

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