Private investors pile into shares, taking holdings to £207bn

PRIVATE investors saw the value of their shareholdings reach £207 billion last year, the highest since the recession began, according to figures out yesterday.

Small shareholders pumped 983 million into the market during 2010, the largest amount since Capita Registrars began gathering data in 2006.

The proportion of the stock market in private investors' hands reached 10.95 per cent at the end of last year, the highest proportion since the summer of 2009 and up from the low of 10.27 per cent reached in May.

Private investors' share of the market had reached 194bn by the end of November but Capita said last month's "strong" Santa rally had pushed the total through the 200bn-barrier.

Shares worth a total of 6.3bn were traded by individual shareholders last year, the highest since the 13bn that changed hands in 2007.

Charles Cryer, chief executive of Capita Registrars, said: "Private investors began buying in a concerted way in the early summer when the stock market plunged.

"Concerns about the durability of the recovery into 2011 do not yet seem to have dented optimism in the wider market or among private investors."

While investors switched some of their cash into more cyclical stocks later in the year, defensive sectors still remained popular despite growing investor confidence.

Miners, minerals and oil and gas stocks saw the biggest sales as investors sold down 160m of their holdings. Investors pumped 261m into financials and 100m into healthcare.

But Patrick Connolly, at financial advisory firm AWD Chase de Vere, sounded a warning note for anyone thinking of joining the stock market rush. "Ideally, investment should involve buying at the bottom of the market and selling at the top," he warned. "Investors chase past performance too often, investing at the top of the market after strong performance has already been achieved."