Hargreaves Lansdown’s Investor Confidence Index fell 13% to its lowest level since records began during the lead-up to the US Presidential Elections.
The November HL Investor Confidence Survey, which was conducted between 1 and 7 November, fell to 59 points, the lowest level seen since the index began in 1995, beating the previous record of 61 points back in March 2008.
The firm said the drop was likely due to central bank policy distorting asset prices, resulting in a “peacock market,” with “all puff and no substance”.
However, although investor sentiment has been on the downturn, markets continue to improve, with the FTSE All Share returning 13% so far this year, and showing resilience since Donald Trump’s surprise success in the US Presidency elections.
Laith Khalaf, senior analyst at Hargreaves Lansdown, commented: “The conundrum is that the stockmarket and confidence seem to be moving in opposite directions. There is some sense in this because as stock prices rise, investors become more wary of a subsequent fall.
“This divergence is probably down to the widespread concern that central bank policy has distorted asset prices, and has led to a ‘peacock market’, which is all puff and no substance.
“So far in 2016 investors have been buffeted by a commodity collapse, the Brexit vote, and most recently the US election, so it is little wonder they are feeling cagey right now.”