The HL Investor Confidence Index registered a new record low, dropping five points, from a reading of 58 in September to 53 in October.
The index was launched in 1995 and measures the confidence of retail investors in the UK stock market.
The average reading over the last 12 months is 69 and over the last 10 years is 92.
Investors’ confidence in North America has risen, whilst confidence in all other markets has dropped or remained constant.
Brexit remained top of the list of investors’ worries, with general global instability, the UK’s productivity problem and the potential for inflation also registering as causes for concern in the index.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “Investors are in grim mood, as time is running out on Brexit negotiations with little progress on show.
“Sentiment was dented by the financial crisis, but not to the extent we are seeing today.
“That’s perhaps because the crisis unfolded in an unscheduled fashion, while the timeline on the UK’s withdrawal from the EU is there for all to see.
“A looming early Budget and a stormy October on the markets will do little to settle nerves.”
He added: “These are challenging times for investors who are faced with a significant known unknown in the form of Brexit.
“In such circumstances, it’s worth falling back on the basics of investing.
“That means taking a long term perspective, keeping diversified, and drip feeding money into the markets to take advantage of any dips.”