Investors Making Wrong Decisions
(30/1/2006)
According to new research by Invesco Perpetual, investors risk making the wrong investment decisions through lack of knowledge. The survey found that four out of five investors do not know the difference between active and passive investments.
The survey, conducted by Gfk NOP* (formerly NOP World) on behalf of Invesco Perpetual, reveals that 83 per cent of investors do not know the difference between the two styles of investment. Their knowledge is only marginally better compared with all those that have no investments at all (86 per cent).
Even giving investors the answer didn’t jog their memory. Only a fifth (22 per cent) of investors picked the correct definition of a passive fund whilst only a quarter (25 per cent) correctly defined an active fund.
Rick White, Marketing Director at Invesco Perpetual, said: `The fact that so many investors do not know the difference between these two very different investment styles is extremely worrying. A lack of understanding when making investment decisions can result in the wrong choices and ending up with an imbalanced portfolio. Whilst we believe there is a place for both investment approaches within a portfolio, investors need to make informed decisions about the funds they are buying.`
If you are concerned about your investment holdings, just click the ‘contact me’ button below and type FUNDS in the comments box and submit with your preferred contact details. You may also be interested in our newsletter article on the Candour Portfolio Service.
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