Shareholders are becoming more tolerant of riskier investment options as the year draws to a close, according to Hyperion Asset Management.
Despite the volatile market conditions displayed through most of 2012, investors are beginning to shift away from cash and other non-growth assets in favour of solid returns.
"When investors are in 'fear' territory, they tend to stay overweight in cash," Hyperion Asset Management managing director Tim Samway said.
"However, as investors seek more volatile asset classes, like equities, they must look for the quality stocks."
As investors begin to shift away from cash assets, the popularity in asset classes with high returns will rise, but there will remain a tendency for investors to look for capital preservation.
Hyperion has said that the key to providing both growth and capital preservation is due diligence and looking at a long-term approach.
Opportunities in less mature companies can offer better growth in earnings, as their long-term growth has not been fully appreciated by the market.
"The focus on due diligence for capital preservation rather than trusting diversification, puts quality investing in a different league," Mr Samway said.
While investors look to strong yielding assets, Mr Samway said many will still be distracted by "short-termism" or a tendency for investors to shorten the evaluation periods of return.
However, those who look to invest while the market recovers will see a better long-term outcome.
