Investors have overwhelmingly turned to cash savings during the Covid-19 pandemic, in a sign of changing risk appetites.
According to new research by trading broker HYCM, 78 per cent of investors have opted to shelter their money in cash accounts since the start of the pandemic.
40 per cent of the investors surveyed indicated a preference for stocks and shares, while 38 per cent said that they were placing their money in property.
In the year ahead, a third (32 per cent) of all investors said they will be putting more money into their savings accounts, 21 per cent are planning on buying more shares and 14 per cent said they will invest in gold.
However, the majority of investors are still cautious due to Covid-19. The pandemic led to a drop in the value of investment portfolios for 43 per cent of investors and nearly three quarters (73 per cent) do not plan on making any major investment decisions for the rest of the year.
35 per cent are still looking at reorganising their finances in preparation for a possible second wave of the coronavirus and another lockdown.
“Investors are still clearly worried about what the future might hold,” said Giles Coghlan, chief currency analyst at HYCM.
“The ongoing retreat to cash savings reflects a general market desire to reduce their risk exposure in the short to medium-term. This is happening even when certain safe-haven assets like gold are posting record-breaking gains.
“With three out of four investors not planning on making any major investment decisions for the rest of 2020, it looks as though many will wait to see if the promise of a V-shaped recovery comes to pass.
“This problem, of course, is that such hesitancy when it comes to spending and investing will only slow the pace of economic recovery, so it is something of a catch-22 situation.”
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