Private investors prove clueless on returns

The greater majority of private investors have no idea what the best investment of the last 12 months was, says research by Star Asset Management.

Only 7.1 per cent of the 2,000 part-time investors knew that the best investments of 2005 were equities.

Choosing between residential property, commercial property, fixed income, equities and cash, just a whisker under a quarter of correspondents said that the best asset had been residential property.

This was actually the poorest performing investment opportunity of 2005 returning just 3.2 per cent over the year.

Equities on the other hand grew by 23 per cent. "This research highlights the gap between consumer perception and reality," said Ben Robinson of New Star Investment.

"It raises a number of important issues - primarily, that equities are still suffering negative sentiment despite their strong performance in 2005. Based on this research, the opportunity cost of this perception gap is very significant.

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