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Investors lose confidence in global markets

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Emma Wall, Head of Investment Analysis and Research, Hargreaves Lansdown:
  • Rising inflation and macroeconomic uncertainty has turned investors off global markets
  • All regions fell in favour over the past month, with Europe falling the most
  • Sentiment fell 21% on average

Emma Wall, Head of Investment Analysis and Research, Hargreaves Lansdown:

“Investor confidence in global markets has fallen more than 20% on average, as HL clients struggle to make sense of market volatility and the continued uncertain outlook. The ongoing tragedy of the war in Ukraine, rising inflation, and the corresponding central bank policy reaction have added risk to equity markets, and turned clients off investing. These figures come just a few weeks after a market-wide survey from Opinium which showed nearly one in five have stopped investing due to lost capital. The bad news is market volatility is unlikely to improve any time soon. Inflation is set to hit double digits in the UK, and is rising steadily across the globe thanks to supply chain issues. This is forcing central banks to up interest rates in a bid to control rising prices – but not so far that policy makers tip the economy into recession. This tightrope walk is not a beneficial backdrop to equity valuation stability. Investors should try to focus on the long term, and ignore daily movements if they can. Diversification is key, and drip feeding monthly through regular savings is the best way to smooth volatility.”

Investor confidence index

The investor confidence index is compiled by surveying HL clients on a monthly basis. Each month we send the investors’ confidence survey to 6,000 random clients and there is a representative split of our clients by age. On average around 10% of clients respond.

Global Sectors% Change May 2022 vs April 2022
Asia Pacific-22%
European-25%
Global Emerging-16%
Japanese-24%
North American-18%
UK-24%
Average % Change-21%

Statistics from a market-wide survey of 2,000 by Opinium for HL in April 2022.

I have enjoyed my investing experience so far29%
I have made money, but I am keen to keep going26%
I was always interested in long-term investment25%
I made money, and don’t invest any more19%
I have lost money, and stopped investing18%
I have found investing to be stressful18%
I have lost money, but am keen to keep going15%

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