Stock market shakes lead bargain hunters

Two-thirds of investors are looking for bargains where the markets are unstable.

A poll by Barclays Stockbrokers during the recent turbulence on the markets finds 66 per cent of investors are aiming to put money into inexpensive stocks.

"Investors are viewing market volatility as an opportunity to invest in cheap stocks and take advantage of the turmoil," said Tom Ryan, director of Barclays Stockbrokers.

"Traditionally in times of volatility, private investors have shied away from the markets. However with transparent information readily available . . . the self directed investor of 2007 clearly is taking charge during uncertain markets and looks for buying opportunities."

However, there is also a high degree of sitting on the fence – with 21 per cent of investors polled saying they were waiting for the storm to pass and five per cent were planning to move to or stay in cash.

Eight per cent of investors were opting for contracts for difference (CFDs) or financial spreads.

"While some investors have clearly been spooked by the market turmoil that took place during the summer, it is encouraging that for the vast majority the recent weakness represents an opportunity," said Henk Potts, equity strategist at Barclays Stockbrokers.

"We believe the underlying medium-term picture looks much brighter than current valuations suggest and anticipate that shares will rise 15 per cent over the next 12 months.

"Global growth remains strong, corporate profitability growth should bounce back in the fourth quarter and company balance sheets still look healthy."