Investors shying away from projects

THE global economic downturn has resulted in wealthy investors becoming unwilling to inject money even in viable opportunities, according to a new survey, while those based in Ireland are among the most conservative.

The survey – conducted among more than 2,000 investors globally by Barclays Wealth and the Economist Intelligence Unit – maintains while nearly 90% of investors can still see opportunities, despite the recession, 68% of them are choosing to ignore them; fearful of further price falls.

The survey also found that investors based in Ireland and Spain are the most conservative.

“The findings of this international report are relevant to Irish investors who have learnt some very hard lessons about risk and return over the past couple of years.

“Heavy losses in property and bank stocks, in particular, have had a much bigger emotional impact than gains made during the boom times,” said Pat McCormack, head of Barclays Wealth’s Irish division.

“Despite the obvious destruction in Irish wealth there is still significant investable wealth in Ireland. Irish investors, like the Spanish, have become more conservative and far more sensitive to losses.

“The focus appears to have moved from wealth creation to wealth protection, emotional considerations are overriding rational financial ones. Investors are not engaging in markets and ceasing opportunities that are out there for fear that they may lose.

“Investors are searching out perceived safe options with cash currently king but with falling deposit rates and medium term concerns about inflation, investors need to take on risk to achieve positive real returns,” he added.