Wednesday 26th October 2016                 Change text size:

Investors to invest more in 2014 – but still failing to consider the long-term

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Investors worldwide are expecting to invest more money over 2014 with almost half doing so for pension and retirement savings. However, the majority are failing to consider the long-term, according to a new report.

The Global Investment Trends Report from investment firm Schroders questioned over 15,000 investors from 23 countries about their investment plans for 2014 and confidence in specific markets and asset classes.

Some 82% of survey participants said they plan to either increase the amount they invested, or keep it the same as last year. Growing confidence buoyed by improving economic data and signs of a more sustained recovery has driven this.

UK investors are among the most confident in Europe about their investment opportunities in 2014, with two-thirds saying they are more confident than they were last year. The average amount to be invested or re-invested by UK investors this year is around £70,600, an increase of £6,400 on last year.

Nearly half (46%) of all investors said that pensions and retirement saving is their key objective in 2014. Yet despite this, just 5% of investors say they will invest money in 2014 with a time horizon of 10 years of more in mind. Instead, 61% of investors said they look to see a satisfactory return within one to five years.

Failing to invest for the long-term can expose investors to additional risk and instability. For instance, campaigners have warned that investors could be hit by a ‘carbon bubble’ after oil giant Shell predicted climate regulation would hit its profits.

The Schroders survey also found that investors are looking to equity markets for growth this year, with 70% looking to invest in this area.

Massimo Tosato, executive vice-chairman of Schroders, said, “The report shows encouraging signs of renewed confidence in equity markets driven in part by improving economic and market performance in developed countries.”

However, he also warned that challenges remained as global GDP remains lower then expected, when compared to recovery rates from previous recessions. Tosato pointed out that “significant weakness” remains in some eurozone countries and the withdrawal of quantitative easing from some emerging markets was weighing heavily on stock markets.

Further reading:

FTSE: sustainability at the world’s leading investment index provider

Impact investment: ESG practices increase risk-adjusted return in the long-term

2014 could be ‘perfect time’ to invest in an ISA

‘Serious and urgent’ reform needed to overcome increasing business short-termism

Investing in the future: smart investment trends

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