Unease over the European debt crisis as well as volatility in the Australian market are key contributors to investment sentiment remaining at low levels.
Investment Trends and The Association of Financial Advisers both expressed to InvestorDaily continued pessimism in the markets along with continued low activity.
In its February 2012 Investor Intention Index Report, Investment Trends said that although there are very small improvements in confidence and levels of activity, general sentiment is still very poor.
"When we asked investors at the end of 2011 how concerned they were, concern levels were right back at GFC levels. Since then it has eased a bit," Investment Trends senior analyst Uwe Helmes said.
"But they are still not saying they are optimistic. [They are] still very nervous and sentiment is still fragile, however [concern] is not as high as the end of 2011."
He said that concern over the situation in Europe, property prices and capital markets are key areas that are keeping investment sentiment low.
Although the report shows a very minor pick-up in sentiment, it is still very low, he explained.
AFA chief executive Richard Klipin said it was his view that investors are "still cautious".
"That really hasn't gone out of the market to any great extent," Klipin said.
Although the situation in Europe has not fully resolved, "it no longer dominates", which should help to improve consumer mindset, he said.
"I think people have acclimatised now, really the GFC has been running since late-2007 to 2008 so we're now four years in," Klipin said.
"There have been patches of glimmer amongst mostly gloom.
"Australia is very well insulated and going very well compared to the rest of the world, but I think
Australian investors are still very cautious about making investment decisions.
"When they [do], they make skewed ones. They're buying well and wisely."
