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Expat Investor : January February 2008
One in five stock market investors (21%) have moved some of their money into more cautious investments, such as cash or bonds over the past three months according to the Investor Outlook report from Lloyds TSB Wealth Management. Nathan Moss, Managing Director, says, "Investors have undoubtedly been rattled by the recent stock market turbulence, and the widely reported 'credit crunch' has prompted many to review their investments. "But it's important for investors to consider their own circumstances and avoid a knee-jerk reaction. By speaking to an expert and building a balanced portfolio, investors can ensure that their finances remain in good shape despite changing stock market conditions." Over a third (36%) of all investors taking part in the research say that they feel apprehensive about stock market investments over the coming year, while just over a quarter (26%) say they feel confident. Confidence in stock market investments is higher amongst investors who have a proper financial plan in place (31%), and better still amongst those who sought the advice of a financial adviser before making changes to their investment portfolio (38%). Only 22% of investors who don't have a plan in place feel confident. Of those that feel apprehensive, over a third (35%) believe that the return from the FTSE in recent years hasn't been good and think the trend will continue. Nearly one in five (18%) think that, in the long term, the stock market isn't going to outperform cash or bonds, and 17% believe that the risk associated with stock market investments means it isn't worth investing in. Of those who feel confident about the prospects for the stock market over the coming year, nearly two- thirds (64%) believe that the stock market should be seen as a long-term investment and that short-term fluctuations should be ignored. Over half (54%) think surveyed feeling apprehensive about stock market investment over the coming year, overall, over half say they feel optimistic about their long-term financial prospects, and only 12% feel pessimistic. Industry advice can improve an investor's outlook, with two-thirds of investors who have a comprehensive financial plan in place feeling optimistic about their long-term financial prospects, compared with 45% amongst those who have not. In addition, three-quarters of those who sought the advice of a financial adviser before making the recent changes to their investment portfolio feel optimistic about their long-term financial prospects. INVESTMENTS January/February 2008 EXPAT INVESTOR 9 Fast Facts 22006 Focus, our award-winning, innovative and cost-effective platform, is a fully integrated banking and investment service. Designed to make your life easier, Focus can save you time and money. To find out more about our first class wealth management services, call us on+44 (0) 1624 645000 or visit www.fairbairnpb.com Focus Have Focus. Achieve More. (EXINV) First class service from the Best International Investment Platform Provider 2007 Winner Best International Private Bank Best International Investment Platform Provider 2006 Winner Best Offshore Bank Best Commitment to Service 2005 Winner Best Offshore Bank Best Offshore Bank Product (FOCUS) Best Internet Service 2004 Winner Best Offshore Bank 2003 Winner Best Offshore Bank Best Offshore Bank Product (FOCUS) 2002 Winner Best Offshore Bank Best Offshore Bank Product (FOCUS) 2001 Winner Best Offshore Banking Product Range distinctly different Fairbairn Private Bank is a registered trade name of Fairbairn Private Bank (IOM) Limited and Fairbairn Private Bank Limited. Fairbairn Private Bank (IOM) Limited is licensed by the Isle of Man Financial Supervision Commission for Banking and Investment Business and its principal place of business is in the Isle of Man. Fairbairn Private Bank Limited is regulated by the Jersey Financial Services Commission to carry on deposit-taking and investment business under the Banking Business (Jersey) Law 1991 and Financial Services (Jersey) Law 1998 respectively. Registered office: Fairbairn House 31 The Esplanade St Helier Jersey. Latest audited accounts are available on request. Ashburton 22151 The Fry Group 22152 Rensburg Sheppards 22153 Standard Bank 22154 Lloyds TSB Wealth Management 22155 For more information just enter the above numbers on the Reader Reply Ser vice coupon on page 20 or visit www.expatinvestor.com FAST FACTS Stock market investors react to credit crunch that in the long-term, the stock market will outperform cash or bonds. Half (51%) say that they have a mix of investment types, so aren't relying solely on the stock market, while 41% believe that the stock market is resilient and that the current market turbulence is a temporary blip. The majority of investors surveyed say they feel well informed about the stock market activity over the past three months, with nearly three-quarters following newspaper stories about the credit crunch. Just a quarter of investors say they feel uninformed about the recent stock market turbulence. Despite over a third of investors pressures from the US. Our prime focus will be on countries with surplus budget and current accounts, such as Malaysia, while other Asian currencies of interest include the Indonesian rupiah, Korean won and Indian rupee. The most obvious candidate for currency appreciation would be the Chinese yuan, but its revaluation may be more problematic and initiated at a pace to suit the Chinese authorities rather than the recipients of its exports. Of the G7 currencies, sterling is likely to be the weakest, undermined by a weaker housing market and lower interest rates in 2008, with the US dollar possibly surprising on the upside. Event-driven hedge fund strategies focusing on shorting US sub-prime debt have been phenomenally successful in 2007, with the Paulson Credit Opportunities Fund returning 550% to the end of October. This theme will probably continue to a lesser extent in 2008, but widen to include other areas of asset- backed credit, including commercial property. On-going market volatility is likely to be increasingly evident in 2008 and hedge fund strategies are likely to flourish in such conditions. Finally, our most exciting geographic areas for equity investment next year will continue to be developing markets, with the addition of Africa (ex South Africa) as an interesting long-term investment. In the established equity markets, our preference is for mega and large cap growth stocks, which should offer more protection than their smaller cap counterparts during more challenging economic conditions. Our preferred areas would be the US and Asia, including Japan.