Lack of knowledge discourages potential investors, says AIC
Potential investors are being deterred from investing in the stock markets by a lack of understanding, according to research from the Association of Investment Companies (AIC).The AIC found that 32 per cent of those polled said that they did not understand enough about the stock market to feel confident enough to invest in it, while nearly a quarter were put off because they did not know how to go about it.Tellingly, the AIC's finding reveal that 38 per cent of respondents did not know what the minimum lump sum for stock market investing was - a quarter thought it was over £1000, when in reality, most investment company savings schemes require just £250.Daniel Godfrey, director general of AICS said: "It's interesting that a lack of knowledge scores so much higher than risk aversion as a reason for not investing in the stock market, suggesting it's a lack of financial understanding, not apathy, that keeps many potential investors sitting on their hands."These results show the important role that good quality independent financial advice can play, alongside the long-term benefits of financial education, where real progress is now being made. "There is also a good deal of information out there for would be investors prepared to do their own homework.
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