Sentiment spikes in third quarter: CoreData
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Samantha Hodge is a journalist with InvestorDaily, a Morningstar publication.
Investor sentiment has spiked to its highest level in 15 months in the third quarter of 2012 as optimism returns to the market, according to the latest research by CoreData.
The market research consultant's Investor Sentiment Research report found that whilst sentiment increased by 13.6 points to -9.9, compared to -23.5 for the second quarter, it still remains firmly in the negative.
"Investor sentiment has rebounded to its highest level since the second quarter 2011," CoreData head of advice, wealth and super Kristen Turnbull said.
"But the past several years of volatility have left investors cautious about backing their instincts and getting back to the market."
CoreData also notes that although investors are beginning to regain their appetite for risk, there is still reluctance to invest. Investment intention continues to remain low at -29.7 for the quarter, down from -24.3 previously.
While sentiment towards property remains negative at -13.0, the Investor Equities Sentiment Index, which tracks sentiment towards shares, rose sharply to -3.0, up from -25.9.
"This is the first time sentiment towards equities has been positive since the second quarter 2011," the report said.
CoreData also found investors are less negative about the prospects for economic growth with around half expecting a slowdown (52.1 per cent), down from 69.6 per cent last quarter, and almost one quarter (24.9 per cent) expecting the pace of growth to speed up.
"Almost half of Australian households say that they're saving at least a little, which is the highest proportion of households saving since quarter one, 2010," Turnbull said.
"The continued savings behaviour means that when intention catches up with sentiment, we're likely to see a flood of cash re-enter the market and a lot of opportunity for financial services companies."