It seems inevitable that when consumer confidence improves people will again turn to equities for their longer-term investment exposures

It seems inevitable that when consumer confidence improves people will again turn to equities for their longer-term investment exposures. The current infatuation for risk free asset classes hardly seems sustainable given the low interest rates these instruments offer and results in most of these investments generating a negative real return after tax. The recently released chart by Westpac (below) tracking a survey asking people where do you think is the best place to invest? is incredibly insightful. Over the next few years as investors become less risk adverse we would expect the allocation to shares will normalize back to pre GFC levels with the clear winners being financial service stocks and asset managers in particular. We are attracted to the operating leverage that these companies offer to rising equity markets and mandated superannuation growth, the low levels of debt on their balance sheets and attractive valuations. @pengana