Americans optimistic while Aussies waver

Both investors and advisers are more optimistic about share market performance over the next six months than they were last month, according to this month’s combined Australian Investors Association and Adviser Ratings sentiment indices.

The November figures show that, despite last month’s Bali bombing and further signs of a slowing economy, 20 per cent of Australian investors are positive about the prospects for the share market, up 17 per cent last month.

According to a similar survey conducted by the American Association of Individual Investors, however, this figure still leaves Australians significantly trailing in terms of confidence behind American investors, over half of whom are positive about the prospects for the share market.

The surveys, conducted between the 30th of October and the 4th of November, also reveal that a large number of Australians are sitting on the fence, with 54.8 per cent of Australian investors expressing a neutral outlook for sharemarkets.

American investors appear to be more confident, with 51.5 per cent bullish. While the differences between bullish and neutral investors in the two countries are significantly different, bears are almost the same for both, recorded at 24.3 per cent for Australians and a slightly higher 27.9 per cent for Americans.

The results also confirm that advisers continue to be far more bullish than investors.

Bulls make up 43.4 per cent of advisers but only 20.9 of investors, and only 5.7 per cent of advisers are bearish compared to 24.3 per cent of investors.

However, in spite of the more bullish sentiment expressed by both investors and advisers, both groups have shown a reduction in the average amount allocated to the share market. Meanwhile, the allocation to cash is at the highest level recorded since the start of the surveys four months ago.