Private investors more cagey than experts

Johannesburg - Economists and market experts may be trumpeting an economic and stock market recovery, but private investors and business owners are less convinced.

This is according to the latest Barclays Wealth Insights survey, a global poll of more than 2 000 high net worth individuals between February and March 2010. According to the compilers, those surveyed are successful business owners who can make informed judgements about what is happening on the economic frontlines.

According to Absa Wealth chief investment officer Phil Bradford, about 25% of the respondents believe the global economy will deteriorate over the next five years, with only 15% who say the economy would grow.

"This is definitely one of the things that surprised me and they are at the coalface; if they wary then this is something to take note of," Bradford said.

A look at the most optimistic and pessimistic countries makes for interesting reading. The five most optimistic include Spain, Qatar, Saudi Arabia, Ireland and India, despite the fact both Spain and Ireland continue to be badly burnt in the fallout from the economic crisis.

The five most pessimistic nations are Monaco, Japan, USA, Switzerland and the UK.

Another issue identified by the survey is that investors are taking a more hands-on approach to monitor those who manage their investments and the kinds of products they invest in.

"Internationally a lot of people had moved into complex products like hedge funds because their friends were doing it, now they are going back to simple and transparent products," said Absa Wealth CEO Carl Roothman.

"Wealthy individuals are taking plenty of time over their investment strategy. They are asking more questions, taking more responsibility for their investments and performing considerably more due diligence on, for example, issues such as counter-party risk which were not major worries a few years ago."