28-05-2025
EXCLUSIVE Have YOU lost money on investments? One in four have sold at a loss in the past year
Almost a quarter of retail investors have made a loss when selling an investment holding over the past 12 months, data shows, as market volatility continues to spook individual investors.
The main reason for retail investors exiting their investments was fear, with 36 per cent concerned that their holdings would continue to fall further, exclusive figures for This is Money from Alliance Witan show.
This is despite the standard advice that investments should be held for at least five years in order to weather short-term price fluctuations.
Alliance Witan polled 1,000 UK adults with at least £10,000 in investable assets.
The past 12 months have proven to be somewhat tumultuous for investors, with global markets having simultaneously crashed following Donald Trump's 'liberation day' tariff announcements.
In the panic, some may have chosen to sell off investments in the hope of locking in what value they had left before stocks fell even further.
Even if they held off during recent downturns, the figures show that one in six have sold an investment at a loss at some point during their lifetime.
Mark Atkinson, senior director of client management at WTW, said: 'Selling an investment at a lower value than it was bought can sometimes be unavoidable, but knee-jerk decisions based on short-term market volatility can backfire on returns.'
However, almost a third of investors, 29 per cent, said they sold at a loss because they needed the money for an emergency, while a further 20 per cent said they needed it to fund a specific life event.
It is generally recommended people only invest money that they can afford to lose, and before doing so take the time to build up a sufficient emergency savings pot to cope with unforeseen costs.
As a rule of thumb, people should put away enough to cover three to six months' worth of living expenses.
This allows you to leave your investments to grow over the long term, something that Alliance Witan says will usually pay off based on historical trends.
It said if investors had placed £100 with Alliance Trust in 1968 and reinvested dividends, leaving their investment for the extreme long term, they would have returned £25,404 by 2021.
Atkinson said: 'With so much uncertainty within the markets today, with tariffs and increased costs impacting organisations across the globe, it's natural that an investor may be spooked.
'However, our previous study "profit from patience" showed investors that stayed invested throughout periods of uncertainty would have experienced higher returns over a long-time horizon than those that made reactive decisions.
'The most important action an investor can take is to ride out the storm, keeping their investments in place.'
He added: 'All investors, no matter how seasoned, will likely have been unsettled by the recent market swings we have witnessed, particularly those with shorter-time horizons.
'Those that choose to stay invested, rather than crystallise any loss, will likely benefit over the longer term as our analysis has demonstrated.'
