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Property now preferred over shares and cash

Self-directed share investors turned off by the high volatility of the stockmarket are increasingly turning to property investment, according to the InvestSMART Funds Flow Survey.

The survey results revealed that property was stretches ahead of cash and shares as a preferred investment option.

On average, of the 1540 respondents surveyed, property holdings were increased by 37% between 2009 and 2011, while in the same period share holdings were decreased by 18.5%, and cash holdings were decreased by 35%.

Also between 2009 and 2011 respondents increased fixed interest investments by 85%.

'The cautious behaviour of investors is what's driving this change into safer asset classes such as property,' says InvestSMART general manager Ron Hodge.

'The Australian sharemarket has been buffeted by global market turbulence in recent times. What started out as a year of cautious optimism was soon quashed by bad news out of Europe with its sovereign debt crisis, China with its inflation concerns and the US suffering lower than expected growth,' he says.

The survey results reveal that the current investment pattern isn't about to change with 23% indicating they would continue working with their current cautious investment strategy.

'Cautious portfolio weightings will once again be the flavour of 2012; this will continue until there's sustained low volatility in sharemarkets in many of the de-leveraging economies across Europe and America,' says Mr Hodge.

Source: Australian Property Investor, 'Property now preferred over shares and cash', 9 November 2011.