Last updated: 11:36 / Wednesday, 12 March 2014
MFS Investor Sentiment Insight

Investors' Thoughts and Behaviors Don't Align

According to the latest MFS Investment Sentiment Insight survey, there is disconnection investors’ between thoughts and behaviors. Investors continue to remain sceptical about investing despite their self-stated optimism and belief that equities represent a good investment choice over the long term.

When asked about their asset allocation and their opinions about various asset classes, their attitudes and behaviors didn't match. Cash had the lowest positive ratings of any asset class and also the highest negative ratings.

But investors had almost a quarter of their portfolio in cash. On the other hand, US equity had the highest positives and lowest negatives, but investors had only 39% of their portfolios allocated to US equity. They may know that this isn't the right choice: Less than half were very confident they had the right allocation.

Investors seem to be reacting emotionally to what's happening in the news cycle rather than focusing on how to meet their long term goals. Lengthening their time horizons will help them match their goals and investments, according to MFS.