The majority of UK investors are optimistic stock markets will perform well for the rest of the year

Stock markets have performed relatively well so far this year, but what do investors expect to happen for the rest of the year?

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

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The first eight months of 2021 have been largely positive for the stock markets – not just in the UK, but across the world. But what are investors’ predictions and hopes for the rest of the year? Do they expect the stock market to continue making gains? Or are they concerned about a possible stock market crash? Let’s take a look.

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What are investors’ predictions for the stock markets?

According to new research from Barclays Smart Investor, current investor sentiment toward the stock market is generally positive. Up to 59% of UK investors are optimistic that the market will perform well for the rest of the year.

Around two-thirds of UK investors (63%) believe that pandemic-hit industries such as hospitality and travel will bounce back. And 60% are confident that the Covid-19 vaccine roll-out will help the markets.

What are the main concerns about stock markets?

The study by Barclays Smart Investor reveals that new coronavirus variants are the biggest concern for investors. Almost two-thirds (65%) of investors are concerned about the impact of this factor on their investment performance.

Inflation is another major worry, with 59% of investors concerned that it will affect their portfolios.

The research revealed that 50% of investors are also fearful about the market ‘bubble’ bursting by the end of 2021.

Furthermore, investors expressed concerns about a potential tech bubble coming to an end. The study shows that 42% fear that stocks in the sector will decrease in value over the next six months.

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What about long-term predictions for the stock markets?

Over the next five years, UK investors predict that sustainable energy, technology and healthcare biotech industries will be the best performers in the stock markets. Meanwhile, the oil and gas, tobacco and mining industries are expected to fare the worst over the next five years.

How should investors proceed?

Commenting on these findings, Will Hobbs, chief investment officer at Barclays Wealth, said: “It’s great to see that investors are generally optimistic on the market outlook – and reassuring that many are still cautious when it comes to predicting the future, and the pathway out of the pandemic, with too much confidence. 

“We don’t yet know what the long-term effects of the pandemic will be on the global economy, but many experts are predicting that COVID-19 will be the catalyst for an industrial revolution. With such change comes real opportunity for investors – but it’s very difficult to pin point exactly which industries or sectors will truly benefit from this innovation.”

Consequently, Hobbs advises investors to practice diversification: “Investing in a diversified set of assets will give investors the best chance of benefiting from whatever the future economy holds.”

As always, it’s important to remember that the value of investments can go down as well as up. Don’t forget to do your research before investing, and seek professional advice if necessary.

If you are relatively new to the concept of investing, consider checking out our comprehensive investment guide. And if you’re already familiar with the concept, see if you can get more out of your investments by using one of our top-rated stocks and shares ISAs, such as the Barclays Smart Investor stocks and shares ISA. When you invest via an ISA, your investment growth or income is usually tax-free.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in the future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

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