Prospects Investors confident over 2011

Prospects Investors confident over 2011 ; An air of optimism has swept over investors, with confidence returning to levels not seen since before the financial crisis. Exactly half of those investors surveyed by TD Waterhouse claimed to be more confident in the UK stock market compared to a year earlier, a level last seen four years ago.

Two-thirds of investors said they expect the FTSE 100 to trade at around 6,000 points by December next year, although there are already signs it could hit this mark this year. Over a third (34%) of respondents said they would invest a spare £5,000 in UK shares, compared with just over a fifth (21%) who would instead put it in a high interest savings account.

In terms of single company shares in which they would invest their money, BP was the most popular, followed by Tesco and then Lloyds TSB. Energy and mining, telecoms and technology, and the banking sector were the three picks to be the top performing sectors in 2011.

However, having a diversified portfolio continues to be of considerable importance to investors, especially when it comes to investing in overseas markets.

Almost a third (30%) of UK investors have bought or sold shares in a company listed outside their own resident country in the last 12 months, with almost half (47%) most likely to invest in Europe over the next year.

The Asian stock market (25%) overtook precious metals and commodities (20%) as the expected best performer over the next few months.

"UK investors now have more balanced levels of confidence in the UK stock market following the highs and lows of the last few years, and this is more in line with the levels of investor sentiment we were seeing before the crisis hit in 2007," said Darren Hepworth, trading and customer services director of TD Waterhouse UK.

"It is encouraging to see that investors have learned to navigate the markets - both in the UK and internationally - with increased confidence and measured optimism, and investment abroad continues to be popular among our respondents, particularly among more active investors."

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