Around one in four potential investors are ruling out equity investments because of a lack of confidence in the stock market, research from Prudential has revealed.
The news comes despite the fact that the FTSE 100 has surged by 43 per cent since its low point of 3,512.1 on March 3 this year, to more than 5,000 now.
But, by shirking the stock market, Prudential warns that investors are potentially missing out on long-term gains delivered by the historically strong performance of shares.
Commenting, Trevor Cheal, retirement savings business director at Prudential said: "The saying that it is not timing the markets but time in the markets that matters could never be more apt.
"Investors often act irrationally and driven by fear they sit out the markets as they begin to recover, missing out on some potentially spectacular gains."
Of those who remain stocks and shares shy, 32 per cent said they could be convinced to invest if they could be guaranteed that they would not lose money, while 13 per cent say they will invest if the market shows strong signs of recovery.
However, there are other options available to investors, Mr Cheal points out: "It is understandable that in volatile markets, investors may not want all their eggs in one basket and multi-asset funds which provide diversification can give them some degree of comfort while still giving the investor exposure to the stock market.
"Those who feel they lack the knowledge to manage a diversified portfolio should consider getting professional financial advice from a stockbroker or an IFA."
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