2006
(06/03/2006) Indecision and sentimental attachment lead some to hold on to shares - new research from AXA
Many of Britain's small investors are retaining shareholdings based on emotional rather than rational criteria, despite the FTSE showing strong 2005 growth of 16%, according to a new study by AXA.
AXA's survey1 showed that 21% of those questioned (equivalent to more than nine million Britons) say they own shares in a listed company, with more than a quarter (28%) saying they keep the shares for three-years or more.
Concern about the right time to sell is a key reason for retaining holdings, with more than a quarter (29%) of investors saying they are holding on to shares either because prices have fallen and they want to wait to recoup their original investment, or because they are worried about selling at the wrong time and missing out on profit.
Around 12% of investors retain shares for three-years or more because they enjoy the shareholder perks, with a sentimental 7%, equivalent to around 900,000 people, claiming they were bequeathed the shares by friends or relatives and don't want to sell them.
Lost share certificates are also a reason for retaining stock, with 1% of investors saying this is why they had kept holdings for more than three years. And 4% said they had no idea why they had retained the shares.
AXA's Colin Nelson stated: "While it is encouraging that investors are holding on to shares as part of their investments, it is worrying how many people are investing their savings in the stock market without seeming to have a clear, rational strategy for managing their money.
"Investors should be setting clear goals for what they want their investments to achieve. Shares can play an important role but investors should be clear about what that role is - is it income, is it capital growth or a mixture of the two. Sitting down with a financial adviser and working out their objectives and then checking their investments regularly to ensure they are on track to meet those objectives can help to give investors more confidence and control of their finances.
"There are tools available to help and just by taking this simple course of action investors will be able to see how their money is working for them much more effectively.
"We are all aware that share prices can go down as well as up, but many investors appear to be hoping for the best and holding on to shares based on emotional reactions, such as indecision about the right time to sell, or sentimental attachment to the shares because they were a gift or bequeathed to them.
AXA recently launched its new wealth management service which includes a planning tool supporting advisers in setting clear objectives for their clients' investments and then tracking them accurately. The wealth management service also provides investors with access to a diversified portfolio of funds which are actively managed on their behalf to maximise opportunities for capital growth and / or income.
- Ends -
More information
If you are a journalist and require further information contact one of our media team
Notes to Editors
1Research was conducted by TNS among a representative sample of 1042 GB adults between 11 - 13th November 2005
About AXA
AXA is a world leader in financial protection. AXA's operations are diverse with major operations in Western Europe, North America and the Asia/Pacific area. AXA employs 120,000 staff and tied agents and, as of 31 December 2005, had € 1,064 billion in assets under management. AXA reported total IFRS revenues of € 72 billion and IFRS underlying earnings of € 3,258 million for the full year 2005. Our previous company performance is not a guide to how we may perform in the future.
AXA ordinary shares are listed on the Paris Stock Exchange; AXA American Depositary Shares (ADSs) are listed on the NYSE under the ticker symbol AXA.