A survey of UK and European investment advisors commissioned by the World Gold Council has found that “safe haven” assets are dominating investment preferences for 2009, with gold and investment grade credit highest rated by advisors.  However, the study also found a surprising degree of optimism for this year’s market conditions.

From a list of ten assets, the advisors surveyed showed the strongest preference for gold, followed by investment grade credit, commodity baskets and cash. Property was the least favoured asset, followed by non-investment grade credit, gilts, oil and equities.

The survey, which included participants ranging from small IFA firms to pan-European advisors, found that 60 per cent of participating investment advisors expected investors to be more risk averse in 2009 than in 2008.

But conversely, the survey found that 30 per cent of respondents see current conditions as an investment opportunity, indicating that some investors could be less risk averse this year.

This optimism was also reflected in the survey’s confidence index: nearly 60 per cent of investment advisors said that they expected market conditions to be better in 2009 than in 2008. 

"There is, perhaps surprisingly, some buoyancy in the opinion expressed by advisors participating in the survey.  This optimism might initially seem to clash with the expectations expressed in the survey of lower risk tolerance from investors in the coming year, but we think it confirms our experience that the investment community has been forced to reconsider the risk-return balance of their investments," said Marcus Grubb, managing director of investment research at the World Gold Council.

"In today's market, safety and stability are at the forefront of investor's minds. We believe the unprecedented conditions of the last year or so have caused investors to look more closely at risk management and achieving good balance through diversification. As we move into 2009, this trend is likely to continue as uncertainty over the financial landscape, combined with future inflationary fears resulting from interest rates cuts and quantitative easing by central banks, prompt further de-risking from investors."