Brits becoming more confident about investing but increasingly cautious with their own choices
An annual study of 4,000 adults found 39 per cent now feel confident investing, up from 33 per cent in 2024.
3
3
3
Of those who have seen an increase in confidence, 40 per cent say it's because they now have an understanding of how the basics of investing work, and 35 per cent put it down to positive returns.
The same number now know exactly how much risk they're comfortable with, shaping how and where they choose to invest.
The research was commissioned by savings and investing platform Moneybox, as part of its annual Financial Confidence Index.
It found that, despite gaining knowledge and experience as investors over time, 68 per cent choose to take a cautious approach when it comes to their investing strategy.
The research also found that so far this year, 23 per cent of investors put more money into a Stocks and Shares ISA towards the end of the tax year, using up as much of their allowance as they can before it resets.
In addition, 22 per cent increased their monthly investment contributions over the last year, while 14 per cent chose to diversify their investments in order to build a more resilient portfolio for the long term.
Meanwhile, 11 per cent of savers decided to move cash into investments this year in search of better long-term returns - which can be beneficial if done with an emergency fund already in place.
At the same time, some investors made riskier moves in turbulent markets - 15 per cent sold part of their portfolio, while the same number made changes in response to geopolitical events.
And 12 per cent moved investments due to market volatility.
Brian Byrnes, head of personal finance at Moneybox, said: 'It can feel unsettling to see the value of your investments fluctuate, especially when no one can predict exactly what comes next.
'But short-term market shocks are a normal part of investing, and history shows that markets recover from volatility over the long term.
"In fact, we've already seen this play out, with markets rebounding from the turbulence earlier this year when sweeping tariffs were introduced.
'The key is to focus on your time horizon and stay invested, rather than reacting to daily market noise.
'Even small, consistent steps, like contributing regularly or diversifying your portfolio, can make a real difference over time.'
When it comes to long-term financial goals, 20 per cent of Gen Z and 26 per cent of Millennials want to build an investment portfolio to grow their wealth over time.
These younger generations are also the most confident when it comes to investing - with 44 per cent of Gen Z and 47 per cent of Millennials saying they feel confident, according to the findings, conducted via OnePoll.
While younger generations are feeling more confident with investing, only 32 per cent of Gen X and 36 per cent of Baby Boomers say the same.
These two groups are also the most likely to be worried about a major market crash wiping out their investments, 27 per cent and 29 per cent respectively.
This caution could reflect older generations' experience of major market crashes, from the dot-com bubble to the 2008 financial crisis.
While younger investors may feel more confident overall, Gen Z are also more likely to feel overwhelmed by financial matters - with 19 per cent citing this as a concern, while 15 per cent are more worried about a market crash.
Brian Byrnes, from Moneybox, added: 'For anyone feeling unsure, start with what you can control, such as how long you are investing for and how consistently you contribute, build gradually, and use tools and guidance to make decisions that suit your goals and stage of life.
'It's not easy, but the more people focus on the long-term, the easier it will be to invest with confidence.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
4 minutes ago
- The Independent
Arsenal reignite interest in Eberechi Eze after Kai Havertz injury setback
Arsenal have reignited their interest in Crystal Palace 's Eberechi Eze after Kai Havertz picked up a knee injury and faces a spell on the sidelines. The Gunners were keen on Eze earlier in the window but Tottenham moved ahead of them to negotiate a deal in the region of £55m plus add-ons. Spurs have had days of negotiations, which have at times been 'difficult', with Palace but are yet to finalise a deal giving Arsenal the belief they can hijack the transfer at the last minute. The extent of Havertz's injury is being assessed but Arsenal would want enough cover in the forward areas with Gabriel Jesus still out until at least November. Arsenal also have players available in positions coveted by Palace, such as Jakub Kiwior, but any suggestion of potential swaps would need to be made in a deal separate to the one for Eze. Negotiations are moving quickly and the principle of a deal with Palace is already in place for Arsenal, with that believed to be similar to the approximate £60m package offered by Spurs but including faster payment terms. In their dealings with Tottenham, Palace have asked for more of the eventual fee paid up front to ensure they can secure a replacement for Eze. They also want to get that player in place before releasing the 27-year-old. For Arsenal, the view from numerous sources was that they preferred is to sell players first before committing to a purchase and then being under pressure to sell before the end of the window. Havertz's injury has potentially changed that and the Gunners feel confident they can convince Eze to choose them over Tottenham having long been rumoured to be the winger's first preference for a move.
The Sun
5 minutes ago
- The Sun
Labour want to use you & your home as cash cows – so council spending can keep spiralling and migrants can keep coming
NO one can say that this government is short of ideas. It is just that every single one of them involves one thing: How to extract even more of our money. 3 3 This week alone has seen a bewildering number of proposals dangled before us, many of which revolve around using our homes as cash cows. One day we learned that Rachel Reeves is considering replacing stamp duty and council tax with a new property tax which would be levied annually on our homes, proportionate to their current value. Then it turned out that actually this new tax wouldn't necessarily mean abolishing council tax — it would run alongside it, raising money from any home sold for more than £500,000. If fact, it transpired that we could face rising council tax bills. Angela Rayner reportedly wants them ratcheted up in more prosperous areas in order to subsidise poorer ones. Then came another suggestion: That higher-value homes might lose their exemption from capital gains tax. It could mean anyone selling a family home having to pay 24 per cent of the profit they have made on their property since they bought it, possibly decades ago. The Chancellor seems to have it in her head that Britain is in the midst of a housing crisis caused by greedy Baby Boomers — those born between the mid- 1940s and 1960s. They have monopolised the housing stock, and therefore she is justified in milking them for all they are worth. It is the same mentality that saw the Bolsheviks blaming the middle classes for every ill and sending them off to the gulags after the Russian Revolution. Is Labour's National Insurance hike a tax on working people? Last year's Budget already meted out punishment for buy to let investors, who were whacked with a two per cent rise in stamp duty. Now Reeves is coming for owner-occupiers too. But it shouldn't take her too much to realise that her proposals would make the housing crisis even worse. If you levy CGT on the sales of family homes, it will act as a huge disincentive for people to sell up and downsize. Why bother, when much of the capital you hoped to release would be gobbled up by the taxman? Punitive taxes on property ownership are just a wealth tax by another name, but they would hit millions of pensioners who are asset-rich but cash-poor. Just because a house has rocketed in value since it was bought in the 1970s doesn't mean that its owner feels wealthy. It is still the same house, whatever it is worth. The real reason for the housing crisis is low rates of house building combined with high rates of migration. 'PUNISHING HOMEOWNERS' When you are building fewer than 200,000 new homes a year but allowing the population to swell by 700,000 a year, it is a recipe for acute shortage. You can't solve that by punishing homeowners. As for council tax, Reeves seems to think that homeowners are getting a free ride. True, it is wrong that in one case a £36million mansion in Kensington was found to have a lower council tax bill than a flat out near Heathrow airport. But overall, council taxpayers have been stung in recent years. According to the Taxpayers' Alliance, the average bill rose by 79 per cent in real terms, ie adjusted for inflation, between 1993/94 and 2023/24. The odd absurdity in the council tax system should not be used as an excuse to push up bills for millions of homeowners. Over the years we have faced higher and higher bills for an ever-lousier service. The more we pay, the more our bins seem to go unemptied and deeper the potholes on our streets. Councils like to blame rising social care costs for their poor finances, but that is only part of the story. 3 Other important factors are poor investments in commercial property made by many councils, and the soaring cost of over-generous local government pension schemes. Freedom of information requests to 300 councils last year revealed that a quarter of what we pay in council tax is disappearing straight into council workers' pension funds. In one case, Basingstoke and Deane Council was found to be paying more into staff pensions than it was raising in council tax. Another reason we are paying more but getting less is lousy productivity. Astonishingly, some councils think the way to right this is to move workers to a four-day week — which they foolishly think will magically lead to them producing more. I have a better idea. Shift unproductive workers on to a zero-hour week. That might just help encourage the rest to put in a bit more effort. 'FLAPPING AROUND' The Government is flapping around for ways of raising extra revenue because Labour backbenchers have made it impossible to cut public spending. Reeves' plan to trim a modest £5billion from the benefits bill was quickly reversed when Keir Starmer realised he could suffer the humiliation of a Commons defeat. That has put an end to Reeves' efforts to balance the books with a combination of spending cuts as well as tax rises. Now, we are just getting the tax rises instead. We are being hammered because Labour MPs refuse to believe there is any such thing as wasteful public spending. Sadly, there is — and it permeates every area of government. But clearly the current government isn't going to do anything about it.
Reuters
5 minutes ago
- Reuters
US tech-stock stumble shows vulnerability in AI trade
NEW YORK, Aug 20 (Reuters) - U.S. technology shares are showing signs of vulnerability after a massive run, which has some investors pointing to overdone AI-driven gains while funds have taken steps to position away from the high-flying sector. Investors are looking to de-risk portfolios or lock in profits during a seasonally difficult period for stocks. Friday's looming speech by Federal Reserve Chair Jerome Powell at the annual Jackson Hole symposium is creating caution, investors said, with the potential for volatility if his comments fail to meet growing market expectations that the central bank is poised to cut interest rates. "When you have overcrowding and you have had such strong performance, it doesn't take much to see an unwind of that," said Keith Lerner, co-chief investment officer at Truist Advisory Services. "At the same time this week, everyone is waiting for the Fed, and there is repositioning ahead of that." The heavyweight S&P 500 tech sector (.SPLRCT), opens new tab fell sharply for a second consecutive session on Wednesday, putting its decline on the week at about 2.5%, while the tech-heavy Nasdaq Composite (.IXIC), opens new tab was off about 2% for the week. Shares of some highflyers, including Nvidia Corp(NVDA.O), opens new tab and Palantir Technologies (PLTR.O), opens new tab, were getting hit particularly hard. The pullback comes after a huge rally in which the tech sector soared over 50% through last week since the market's low for the year in April. That easily topped the 29% gain of the broader S&P 500 (.SPX), opens new tab during that period and drove up valuations of tech stocks to lofty levels. Investors cited wariness about the artificial intelligence trade, which has been a key driver of tech stocks and the broader market as indexes have soared to record highs this year. Shares of Nvidia, the semiconductor giant that has symbolized the AI trade, have gained about 30% this year while shares of AI-focused data and analytics firm Palantir have roughly doubled year-to-date. Indeed, the tech sector's price-to-earnings ratio recently reached about 30 times expected earnings for the next 12 months, its highest level in a year, according to LSEG Datastream, while tech's share of the overall S&P 500's market value is nearly its highest since 2000. Recent cautionary signs included a study from researchers at the Massachusetts Institute of Technology that found that 95% of organizations are getting no return on AI investments, as well as comments by OpenAI CEO Sam Altman, who told tech news website the Verge last week that investors may be getting overexcited about AI. Since last week, some AI-linked shares have pulled back sharply: Nvidia has dropped about 5% while shares of Palantir have slumped some 16%. In Europe, stocks of so-called AI adopters have been under pressure over concerns over how powerful new AI models could disrupt the software sector. Still, some investors said, the caution is unlikely to be a sign that enthusiasm over AI is fizzling. 'These are price corrections," said Andrew Almeida, director of investments at financial planning network XYPN. "But if you look at the big picture, it's clear that more people will be investing more dollars in AI infrastructure. This is certainly not a 'reckoning' with the AI theme." Investors also could be paring back their stock exposure during a traditionally rocky period for equities. August and September rank as the worst-performing months on average for the S&P 500 over the past 35 years, according to the Stock Trader's Almanac. "Valuations were stretched, these names have not taken a breather, and we're going into a tougher season for stocks," said King Lip, chief strategist at Baker Avenue Wealth Management. Other sectors such as consumer staples (.SPLRCS), opens new tab, healthcare (.SPXHC), opens new tab and financials (.SPSY), opens new tab were up on the week, while relative strength for the equal-weight S&P 500 (.SPXEW), opens new tab signaled to some investors a possible start of broadening of gains beyond the massive tech stocks that have led indexes higher. Powell's upcoming speech comes as Fed fund futures on Wednesday were indicating an 84% chance that the central bank will cut rates at its next meeting on September 16-17. Investors will be watching to see if Powell gives any indication that the central bank is on track for such a move or if he pushes back on the market's expectation for easing, which could spark volatility. Tech stocks tend to carry higher valuations which could make them sensitive to higher-than-expected interest rates going forward. "There are a lot of people who have overweighted tech, and it has worked for them," said Chuck Carlson, chief executive officer at Horizon Investment Services. "They don't want to get caught on the wrong side of that if in fact, the Fed doesn't do anything in September. So I think that is also causing (investors) to maybe not necessarily get out of tech, but to reduce the overweight a little bit."
