Being out of equities markets is likely to be the biggest risk for investors in 2009, rather than being in them, said Mr Craig Hobart, head of retail at Tyndall/Suncorp Investment Management.

“Many investors who thought they were playing it smart and safe by locking themselves into a term deposit, could easily find that they miss out on the turn of the equity market and can’t buy in again until it has risen, having well and truly crystallised their losses.

“Such investors, who have maturing term deposits, will find that the cash rates now on offer have decreased substantially and could well see the sharemarket rising while they are still locked into the term deposit.

“Dividend yields on many stocks are already significantly higher than cash rates which could lead to more cash going into equity markets. In fact, even if forecast dividend yields were to fall 30% in 2009 , the dividend yield of the market would be greater than 5% with additional tax benefits to be had”

“This isn’t to say that there is not going to be further volatility during the year, but the risk for investors who are not invested in equities is more likely to increase during the course of year.

“Long term investors who haven’t got an adviser and who panicked, liquidated their portfolio in the depths of the downturn, and are now sitting in cash, face the difficult decision of when and how to get back into the market. These investors are likely to find 2009 is another tough year.

“Financial planners who persuaded their clients to stay true to their long-term investment strategy, rather than putting all their funds into cash, will prove their worth to their clients.

“Such investors, who have strategies that suit their needs and circumstances, are going to be more comfortable with, and less nervous about, the medium- and long-term outlook, than those who do not.

“These long-term investors may not see the benefits of this at the moment, but will do so in two or three years time.

“The market recovery will probably be rapid and untimable. By the time people realise the market has started to recover, it will be too late to take full advantage of the good, cheap stocks,” Mr Hobart said.