Investors are no longer pessimistic when it comes to the securities industry, the Financial Times reports, citing a survey of 1,535 investors by Sanford Bernstein. But that confidence is leading many to overestimate their own holdings, with the average investor reporting their domestic equity portfolio has increased 9.6% over the past 12 months, which is impossible considering the S& P 500 benchmark index has gained a mere 5.5%.

"The U.S. securities industry is in the midst of a retail recovery that begun in August 2004 and has accelerated since then," said Brad Hintz, a Sanford Bernstein brokerage analyst. "Trading volumes of retail investors have risen substantially and new money has continued to flow into mutual funds."

According to the study, 65% of retail investors are satisfied with the performance of their portfolios, as opposed to 38% when the survey was conducted in 2002.

Seventy-five percent of investors that rely on brokerage advice were satisfied with the advice they had received.

The survey also reveals the positive outlook investors have on the equity market for the future, as many said they believed stocks would do better than real estate over the upcoming five years. They are so optimistic that 81% said that they mostly likely would not reduce their equity holdings in the future.

Hintz claims that the mutual fund industry has cleared its name since the scandals, and has won back the confidence of investors.


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