Investor sentiment remains negative: FSC

Investor sentiment has slipped slightly further into negative territory in the most recent quarter, according to the latest Financial Services Council (FSC)/CoreData Investor Sentiment Index.

Investor sentiment fell a further 0.5 points to negative 9 over the third quarter, according to the survey of 770 participants from CoreData-brand management’s proprietary database of investors, whose answers were calibrated to ABS population data.

Sentiment is 13 points higher than it was at the beginning of 2009, but has dropped more than 16 points from where it was at the end of last year when investors were optimistic about the strength of the Australian economy and their own financial security, the survey found.

“While sentiment did not deteriorate significantly, it is clear investors remain uncertain about the future,” said FSC chief executive John Brogden.

“Investor uncertainty is not surprising given the concerns about the European and US economies and the recent period of political upheaval resulting in Australia’s first minority Government in 70 years,” he said.

While investors are reluctant to invest new money, their satisfaction with existing investments remains consistent with the last quarter at 37.7 per cent, and a further 37.6 per cent are neutral, he added.

Steady interest rates over the past three months have provided a reprieve for mortgage owners, which means the average household is slightly better off this quarter, according to Kristen Paech, head of advice, wealth and superannuation at CoreData.

“However, the expectations around future economic growth suggest Australians remain unconvinced that the future is bright, despite the market recovery,” she said.