By Maximilian Clarke
Private investors have seen £24bn wiped off their holdings since their values peaked in May, Capita Registrars’ latest figures show.
Of this loss, £5.5bn can be attributed to the most recent euro crisis from the 9 December alone, leaving the total shareholdings at the end of 2011 at £213bn.
Private investors have responded to the extended economic and financial crisis by reducing their shareholdings for the first time since spring 2010. Although the last five consecutive quarters have seen buying totaling £3.5bn, investors decided to sell £695m off their holdings between September and November 2011. This is the first time all sectors have seen net selling in over four years.
"The low trading volume shows this is not a rout,” comments Charles Cryer, Chief Executive of Capita Registrars. “The selling is less than one fifth of the total invested in the last year and a half, although the fact that no sector saw net buying shows that this was nevertheless a decisive retrenchment."
However, the lack of investment alternatives has prevented investors from selling their equities on a large scale. Charles adds, "Investing in equities still makes sense for those thinking longer term, particularly as they are still providing an attractive income. It is clear though that should the markets find any stability, equities will continue to be a popular long term investment for retail holders.”
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