South West investors seek safe havens in face of looming storm

New research has revealed that investors in the South West are looking for safe places to put their money in the face of looming recession.

A survey by law firm Michelmores of 1,500 affluent millennials, Gen X and baby boomers found that the cost of living crisis has changed investors’ attitude to risk and impacted the way people are choosing to invest their money.

Each of the generations surveyed all have a higher interest in traditional forms of investment, such as cash and property, than two years ago.

The research also indicates that investors are highly unlikely to buy into ‘riskier’ assets such as cryptocurrency in the coming year.

Just over half  of respondents said that increased cost of living had decreased their appetite for risk to some degree in investment choices.

Investors in the South West were more likely than any other region to rate the level of risk as most important when considering how to invest, at 74 per cent versus the UK average of 69 per cent.

However, despite the greater avoidance of risk, only 16 per cent describe their current financial position as ‘pessimistic’, while 37 per cent say they feel ‘comfortable’.

The data indicates that investors of all ages have an increased awareness of risk, yet over half of those living in the South West state that they are still fairly or very likely to invest in financial products or schemes within the next year, slightly less than the UK average of 58 per cent.

Around a quarter of South West investors view cash (21 per cent) and property (28 per cent) as the best protected investments, while bonds (17 per cent), equity funds (11 per cent) and commodities (11 per cent) are less popular. There is a very low appetite for investment in cryptocurrency (six per cent), a view held by investors across the UK.

Richard Cobb, senior partner at Michelmores, said: “ The instability caused by Brexit, the pandemic, and the war in Ukraine – on top of a forecasted global recession – has led to investors being more risk averse in their financial decisions.

“Investors are becoming disillusioned with riskier asset classes such as cryptocurrency and are instead choosing traditional forms of investment, such as cash and property.

“While our data suggests that awareness of risk is heightened in each generation, more confident investors with a longer-term outlook may seize the opportunity to buy up assets while the value is low and potentially reap the rewards.”