Aussie investors confident despite volatility

Australian investors remain positive despite the recent market volatility driven by the US sub-prime meltdown, according to a survey released today by online investment resources firm Direct Access.

The survey found that despite the volatility, the majority of survey participants remained confident in their outlook, with 64 per cent predicting the market would continue to deliver returns greater than 10 per cent over the next couple of years.

It said a further 8 per cent of respondents predicted potential returns greater than 20 per cent, while 21 per cent believed the market would actually slow to return lower than 10 per cent.

Remarkably, just 3 per cent of respondents believed there would be a major correction resulting in significant shareholder losses.

When asked whether the market was over-valued following the recent correction, 78 per cent of respondents said no.

Importantly, almost half of all those surveyed believed the greatest risk to the performance of the Australian share market was a US-led recession.

Commenting on the results, Direct Access spokesman Blair Cooke said it represented a vote of confidence in the economy despite recently volatility in the global market.

He said, however, that there was still cause for caution and that even if the market continued to recover investors would need to assess their individual situations and ensure they are sufficiently diversified to cope with any further instability.

Cooke said that managed funds could be a valuable diversification tool since they provided exposure to a number of asset classes.