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Investors retreat to cash savings during Covid-19 crisis


UK investors are looking to savings accounts and the stock market as they adapt their financial strategies due to Covid-19, new research commissioned by HYCM, an online provider of forex and Contracts for Difference (CFDs) trading services for both retail and institutional traders, has found.946 UK-based investors took part in the survey, all of whom have assets in excess of GBP10,000, excluding pensions, savings, SIPPs and properties they live in.

The research revealed the most common assets investors currently hold are cash savings (73 per cent), private pensions (51 per cent) and stocks and shares (44 per cent). A third (33 per cent) of all investors said they will be putting more money into their savings account in the coming 12 months, while 22 per cent are planning on buying more shares. 
When it comes to the least popular asset classes, cryptocurrencies (20 per cent), classic cars (21 per cent) and social and impact investments (22 per cent) ranked the lowest. However, 15 per cent of all investors surveyed said they are considering social and impact investments in the year ahead.  
The research conducted on behalf of HYCM revealed that 30 per cent of UK investors have radically changed their investment strategies for the current financial year as a result of the coronavirus pandemic. Nonetheless, despite the uncertainty, 36 per cent are confident in the way they are managing their finances at present. 
Looking to the future, 31 per cent of investors believe they will emerge from the coronavirus pandemic in a stronger financial position. Yet the same number (31 per cent) are also making more short-term financial decisions given the difficultly of effectively planning for the future.  
Giles Coghlan, Chief Currency Analyst at HYCM, says: “The volatile trading conditions spurred on by Covid-19 clearly has some investors worried. Even with interest rates at a historic low of 0.10 per cent, the majority are looking to the low-risk option of cash savings. That said, despite the initial losses suffered on the FTSE as a result of COVID-19, a significant proportion of investors are also considering stocks and shares in the months ahead. 
“Looking to the future, the market sentiment shows some sort of optimism among many investors that they will be able to weather the current challenge, though this might require making more short-term investment decisions. With markets slowly recovering, new opportunities are presenting themselves. The challenge, though, is for investors to still work towards long-term financial objectives even when there is so much uncertainty around us.”  

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