Actions Speak Louder than Words for Private Investors

European private investors appreciate continuity with regard to their investment strategy. However, this contradicts to a certain extent what they do or plan to do. These are the major findings from a survey carried out by GfK Ad Hoc Research Worldwide in cooperation with the Wall Street Journal Europe.

Detailed results of the survey covering approximately 9,500 private investors in twelve European countries between 11 to 24 October 2001 were published in the Wall Street Journal Europe last week. They were asked about the current type of financial investments, which type of investment they considered to be most important and how they would invest their money if they had Euro 50,000 at their disposal.

Britons and Swedes, who were generally considered to be the most experienced Europeans in terms of various financial investment opportunities, particularly shares and equities funds, proved to be the most contradictory. One in three of the British private investors surveyed held shares in equities funds and one in five owned shares. However, only five per cent of respondents cited shares and fourteen per cent equities funds as their major form of investment. A different picture emerged when they were asked how they would invest Euro 50,000, with equities funds (44%) suddenly gaining in popularity to catch up with short term money market investments (59%) and even eclipsing pension funds (29%). In addition, one in four respondents would also buy shares. Swedish respondents displayed a similar, if slightly more extreme, behavioural pattern to their British counterparts. They frequently own shares and equities funds but do not regard them as a major form of investment. However, if they had the opportunity of investing Euro 50,000, they would mainly buy shares and equities funds.

In principle, the same goes for German private investors, although they seem to have far less experience in the various types of financial investments. Almost 60 per cent place their money in short term money market investments, nearly one in two has a life assurance policy, 13 per cent hold shares in equities funds and only eight per cent own shares. Accordingly, views also differed with regard to which types of investment they considered most important. If they had Euro 50,000 at their disposal, German respondents preferred lower risk alternatives: equities funds (19%) rather than shares (nine per cent), but preferably fixed-income securities (27%) or short term money market investments (30%). Only 18 per cent would invest in life assurance.

The general consensus is that short term money market investments are preferred in almost all countries. Many investors have set aside at least a portion of their assets for this purpose and currently consider it to be the most important type of investment. If they had Euro 50,000 to invest as they chose, the tendency would ultimately be to opt for short term capital market investments.

All articles 2006-22 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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