Stock market troubles to prompt more cautious investments?

At the end of trading yesterday (August 18th), the S&P/ASX 200 index closed 3.5 per cent down after hitting a six-day low, something that may tempt investors to look for more secure options than the stock market, such as term deposits.

Simon McGrath, an analyst at Bell Potter, recently told Perth Now that many Aussies do not have the confidence to risk their funds on the stock market.

The developments over the last couple of weeks may make them even less likely to do so as global stock markets dipped.

At the start of the month, the S&P/ASX 200 index plunged four per cent, reducing the value of Australian stocks by almost $60 billion.

However, those who want to invest their cash may find that a term deposit provides them with a less risky option.

This is despite the news over the last week that many banks, including Westpac and ANZ were cutting the term deposit interest rates on these accounts.

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