The ghost of the Great Financial Crisis of 2008 still haunts most UK investors, according to a survey by UK fund manager Legg Mason. Are you one of them? According to Legg Mason’s Global Investment Survey, which polled more than 16,000 active investors around the world, 50% of UK investors’ investment choices are still being heavily influenced by the legacy of the crisis.
Great Financial Crisis: investors scarred for life?
The UK stands above the global average of 48% of investors who admit that the scars of the Great Financial Crisis still run deep and impact the way they trade and invest. In the USA it is only 41%, but in continental Europe many investors are still living in the shadow of the crisis, with figures as high as 60% in Spain and 57% in Italy.
“To still be discussing an event a decade later is unusual, and illustrates what a pivotal point in history the credit crisis and subsequent global recession were,” says Alex Barry, head of UK fund sales at Legg Mason. “Financial markets have recovered strongly and balanced, diversified portfolios have delivered attractive risk adjusted returns over the last decade.”
The Legg Mason survey also found that UK investors believe it is important to check up on the performance of their investments regularly. In total, 86% of investors agreed it was important to keep track of investments regularly. A further 81% said they were investing for the long term for events such as retirement income, rather than the short term. This is above the global average of 75%, although one suspects that this number is slanted by a more short term approach on the part of US investors, many of whom embrace a shorter term, active strategy.
The European numbers make the most interesting reading as they illustrate how investors are still living under the shadow of the crisis. This is partly because many European economies have suffered the direct effects of the Great Financial Crisis for longer than the UK, with the Eurozone seeming to roll from crisis to crisis. The issues with the Greek and Italian debt mountains have meant that Eurozone investors never feel like they are far from a major financial implosion.
In many respects, the Great Financial Crisis was an important lesson for investors, although it admittedly undermined confidence in the financial system that had served as the foundation stone for the growth in the global economy since the end of the Cold War.
