Investors struggle to predict market direction
Investors are sitting on the fence in terms of market sentiment with the latest survey of advisers and investors released by theAustralian Investors Associationindicating neutral market outlook sentiment is at its highest level for twelve months.
Despite investors tapering back their market bullishness (52.5 per cent hold a neutral market outlook), many advisers retained their confident outlook for markets with 54.3 of the 68.2 per cent who were bullish in February maintaining their viewpoint.
Meanwhile investor sentiment was less optimistic with a drop in those anticipating strong market returns from 50.9 per cent down to 38.6 per cent.
The survey also revealed a 15.5 per cent increase since February in the number advisers predicting a flattening of the market over the next six months.
In fact, more than half of the advisers who predicted a market downturn in the last survey have now upgraded their forecast to neutral.
Investors have also moved towards neutral territory with a 52.5 per cent of survey respondents anticipating no real market movement over the next six months, a 7 per cent increase.
The number of investors predicting a bearish market has more than doubled from 3.6 per cent in February to 8.9 per cent in April 2004.
38.6 per cent of investors maintain a positive market outlook. This signals a sharp drop off in optimism, particularly when compared to October 2003 when six out of ten investors surveyed forecasted strong market growth.
This is the first time since June last year that investor sentiment has not been skewed towards bullish.
Despite almost 14 per cent of those investment professionals who were bullish in February moving towards neutral grading, the bulls continue to dominate adviser sentiment.
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