Survey suggests energy for 2006 investments

Nearly half, or 46 percent, of 1,006 investors surveyed chose energy as one of the top three investment opportunities, up from 32 percent in November 2004. Though wary about the current energy situation, 66 percent of those said the potential growth of the industry is the main reason to invest.

The real estate industry ranked second as 16 percent of shareholders selected it as a good investment in the current environment, down from 22 percent in 2004. The third best industry to invest in this year was pharmaceuticals, selected by 12 percent of respondents.

Shareholders chose automotive, travel and government as the worst sectors for investment this year.

In the survey, 44 percent of respondents placed automotive among the top three worst segments, 36 percent pegged travel and 29 percent chose government. Shareholders said out-of-control costs were the main reason for poor placement.

Compared to a year ago, more shareholders say automotive is not a potential growth industry, at 37 percent compared to 21 percent. Twenty-seven percent say its services and products are out of date, up from 12 percent last year.

The health care industry has improved, according to shareholders. Only 11 percent said health care was one of the three investments, down from 23 percent who said so in November 2004.

The BetterInvesting confidence index is at an all-time low of 1.2 on a scale of –100 to 100, where zero equals a neutral attitude toward the stock market. Confidence is lowest in the Midwest with an index of –1, down from January 2004 when the region’s investors had an index of 21.3.

Fewer than four in 10 shareholders, or 38 percent, say it’s a good time for new investors to get involved in the stock market. Three in four shareholders, or 77 percent, predict the market will improve or stay the same in 2006.

The number of investors who believe the U.S. economy is headed in the right direction is at 46 percent -– its lowest since September 2003 when it was 57 percent.

The online poll was conducted in October by Michigan-based BetterInvesting, formerly called the National Association of Investors Corp.

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