INVESTOR confidence in the stock market has reached a three-and-a-half -year high, according to a survey by the Association of Investment Companies (AIC).<br /><br />It found confidence among active investors is at its highest level since February 2006. Nearly two thirds of investors expect equities to outperform property, and 52 per cent plan to increase their stock market exposure over the next few months. <br /><br />The findings also indicated investor appetite for risk is growing. Although a fifth of investors are playing safe by favouring blue chip stocks, nearly 17 per cent are favouring smaller companies. A further 17 per cent cited commodities as an area they intend to target in future.<br /><br />Domestic markets continue to remain a firm favourite for investment. The majority (over two thirds) of investors said they are investing in the UK at the moment, with 11 per cent saying emerging markets were a favourite. This was followed by Asia Pacific (eight per cent), Europe (seven per cent) and North America (four per cent). Respondents also expressed growing confidence in the market – a record 19 per cent expect shares to outperform the housing market over the next year.