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Investor confidence plummets to near-record lows

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Investor sentiment fell to its second lowest level in two-and-a-half years last month. 

According to figures from Lloyds Private Bank, confidence among UK private investors dropped throughout December to its second lowest level since July 2013.

During this period, only September 2015 recorded lower levels of investor confidence, which was driven by initial concerns about China’s economy and the impact of its currency devaluation.

With concerns about China ongoing, sentiment towards all individual asset classes also declined month-on-month, with the exception of UK property and gold, which bucked the trend with small rises.

Actual market performance fell in December on all ten asset classes compared with the previous month, the Lloyds report said.

Markus Stadlmann, chief investment officer at Lloyds Bank Private Banking, said: “Investors are feeling particularly gloomy at the moment, with asset class performance dropping off as we start 2016.

“Given declining market performance and falling levels of sentiment, it is surprising to see sentiment towards bonds also falling. But, by sticking to familiar investments like property and gold; some investors might be missing the potential opportunity offered by lower risk fixed income assets such as bonds.”

When comparing the year-on-year changes in sentiment, only UK property has increased its positive position. Eurozone equities have also seen an improvement, but sentiment towards this asset class remains extremely negative.

Despite their 10.7% growth in actual market performance, Japanese equities are still failing to impress the UK investor; the sentiment reading hit its lowest point since its record low in this survey, also registered in September 2015.

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