Share ownership remains stable

The results of the 2008 TD Waterhouse Investor Confidence Index show that overall, just over four fifths (86%) of investors surveyed continue to hold shares in either UK or international companies, despite a year of economic and market turbulence.

Looking at the results in detail, share ownership in overseas companies has increased to 42% (from 32% in 2007). Other forms of investment have also seen a marked increase as investors shift focus this year, with increased ownership in unit trusts (43%, up from 34% in 2007) and bonds or gilts (35%, up from 19% in 2007).

The results of the survey indicate that UK investors are also becoming more considered in their investment approach. Nearly four in ten of those surveyed (38%) said they have invested in a regular monthly investment plan over the past 12 months and just under a fifth (17%) have invested in a SIPP (up from 10% in 2007). There has also been an increase in stocks and shares ISA investment this year (58%, up from 48% in 2007).

Given £50,000 to invest, nearly half of respondents (49%) would put the cash into share based products, with just under two fifths (39%) choosing property (including paying off the mortgage) as a second option. Meanwhile, Tesco is this year's company of choice for those with a spare £5,000 to invest.

Commenting on the results, Angus Rigby, CEO of TD Waterhouse UK said: "It is encouraging to see that retail investors in the UK are prepared to batten down the hatches and weather the current economic storm. The results of this year's Investor Confidence Index show that a significant number of investors in the UK still see stocks and shares as a good place to put their money, and are more willing to embrace international investment opportunities. What's more, it is encouraging to see investors adapting to the harsher economic environment and making sensible choices about where and how to invest their money."

Key findings from the latest Investor Confidence survey show that:

Nearly half (45%) of investors surveyed said they are more cautious in their investment approach, given the economic downturn, with a quarter (24%) transferring money to safer investments

A third (34%) of investors believe that drugs and heathcare sectors will be a top performer in the next few months. The retail and leisure sector came bottom in confidence with just 12%, marginally below the banking sector at 17%

Confidence in financial services has dropped significantly, now ranked at 16th place (from 2nd in 2007) in the list of sectors expected to perform best next year

International investment grows as confidence in the UK market slows:

Investors are more confident about investing in foreign markets and increasingly looking further afield to trade, while the UK stock market suffers a drop in confidence.

Nearly two thirds of investors (64%) are less confident in the UK stock market than they were 12 months ago (compared to under a third (30%) in 2007)

In comparison, investors are embracing overseas investment - nearly half of respondents (46%) bought shares in companies listed outside the UK in 2008, up by 17% from 2007

Four in ten UK investors (38%) said they were most likely to invest in Asia in the year ahead, up from 19% in 2007

Up to a third of UK investors (31%) see the USA as the market they are most likely to invest in over the next 12 months (up from 24% in 2007)

ISAs remain the investment product of choice:

71% of respondents have invested in an ISA this year compared to 67% in 2007

Stocks and Shares ISAs continue to increase in popularity, with 58% of respondents holding this type of ISA compared to 48% in 2007 and 41% in 2006

Looking forward, job security is the number one concern for 2009:

Overall, 42% of respondents are worried about the security of their job in the current market and economic climate

A third (34%) were concerned about the safety of their money in the bank/building society

A similar proportion were concerned about the value of their pension (33%)

While there are a small proportion (6%) of people out there who are not worried about anything

Angus Rigby concludes: "We are coming to the end of what has been an extraordinary year in the world's financial markets. People's attitudes to investing have certainly been affected, yet the appetite for investing in stocks and shares is very much in evidence. Increased investment in overseas markets combined with lower risk investment products shows that investors are determined to balance the level of risk they are taking with their portfolios.

"However, it is also clear that the coming year will be crucial for investors, particularly as their personal circumstances, such as job security, could impact their continued ability to invest. During 2009 retail investors in the UK will have an even greater need for quality investment products and the best possible level of service - and it remains our business to make sure these needs are met."