Business & Investment

Almost three-quarters are not confident in investing

New findings suggest that more than 70% of people who save are not confident enough to take the plunge.

According to online investment firm Wealthify, only one in six people with savings of £ 5,000 or more in the past year has gone to the stock market, even though nearly 60% have increased their savings since the pandemic began. I considered investing in.

According to the survey, nearly 40% of the surveyed people do not understand the mechanism of investment, and 22% find it difficult to understand the language.

Will you take the plunge? More than 70% of people aren’t confident enough to take the plunge, a fresh study from Wealthify suggests

Interest rates were solid and couldn’t overcome inflation, but more than 40% said they were happy with the benefits of cash savings.

Welsify said: “This can mean that millions of people are missing out on opportunities to build future wealth.”

Lack of confidence in investment was most apparent between “millennials” and women, and they felt this way, saying that both groups “did not understand the process.”

“I’m worried about losing money once I start investing.”

Dawn Shaw's mother helped shape her attitude towards money

Dawn Shaw’s mother helped shape her attitude towards money

The Dawn Show (61) lives in Leicester with her husband and has three children. She is currently retired and her husband is a manufacturing supervisor.

She has been saving for about 5 years and they are planning to buy bungalows.

Mrs. Shaw said this was money:’I feel I’m not fully aware of the risks and benefits of investing and I’m worried that if I invest in something I might lose money doing.

“If I have more information and I’m sure the profits outweigh the risks, I’ll probably invest. I’m also a very conscientious person and ethics in all areas of the company. Invest only in ethical companies.

Mrs. Shaw’s career also influenced her attitude towards money and savings.

“My mother, who worked hard to take care of me, was very confident that you would buy only what you could afford and save to buy what you can’t currently buy.

“Neither I nor my husband find it very beneficial to save money because we don’t know what the future holds. This is because interest rates are low because we were willing to invest in the past due to unknown risks. Nevertheless, it means that you have chosen to use a savings account instead.

She explains why Mrs. Shaw is motivated to try to invest.

“If I was taught this at school, it would be very helpful if I felt that having this knowledge as my children grew up would help them understand the value of money and how they invest. I did. “

Despite the rise in accessible financial education content in recent years, nearly 40% of millennial savers surveyed say they don’t know where to go to learn more about their investments.

Monopoly is still a problem, with 54% claiming that investment is not for people like them. Three out of five said they didn’t know where to start when it came to investing in options.

“Investing was never attractive because I am risk averse when it comes to money.”

John Magill is risk averse when it comes to financial and investment issues

John Magill is risk averse when it comes to financial and investment issues

John Magill, 69, lives in Chelmsford, Essex. He is saving cash and started saving more than 20 years ago.

When it comes to investing, Magill said it was money. ‘If you have the knowledge and confidence in your ability to not lose cash, you will invest. I am risk averse. “

I didn’t rush into stocks directly, but I had a pension that was used up, so I started another pension for my granddaughter.

About 70% of those surveyed say they have no long-term savings goals, claiming that this is true for men rather than women.But about half Many savers who do not have long-term savings goals are cleaning up their money for “rainy days.”

Andy Russell, CEO of Wealthify, said: But it is important that it does not have a lasting impact on our future plans. “

He added: “Many savers have stopped exploring options because the complex ways of investing are often still explained and investors are aware of what they should be. “

It’s realistic how to invest, what to invest in, knowing the challenges, and of course you can lose the money you put in. With this in mind, an investment that may be worth getting financial advice before taking the plunge.

“I grew up hating stocks because my grandmother lost money during the war.”

Christine Cain's grandmother lost a lot of money during World War II

Christine Cain’s grandmother lost a lot of money during World War II

Christine Cain, 72, lives in southern Wales and was a counselor before she retired.

She said this was money:’Unfortunately, when I divorced a few years ago, I had no income at all, so I had to rely on the pension I had from my previous job. This meant I was immediately in a reduced pot of pensions, which had a financial impact on me for the rest of my life.

“I know that investments can go up and down, so I don’t have the money to put them at risk.

“I grew up hating stocks because my grandmother had invested so much in a local shipyard that she lost a lot of money during World War II.

“This is always deep in my heart, so I have never invested in the stock market in any way.

“I can’t afford to lose it, so I’m very skeptical if anything encourages me to invest some of my remaining pensions in the stock market.”

Lower risk funds to help you step into the stock market

George Nixon

One easy way to invest is to outsource everything to what is known as a “robo-advisor.”

These online investment services tend to ask about 10-15 questions to allocate appropriate investment baskets to investors and manage them on their behalf.

They are becoming more and more popular, but they still remain a niche.

Need a helping hand?RoboAdvice’s cost of investing in low-risk funds
Fund 2020 performance Platform charges Investment cost Total cost Investment cost of £ 10,000
Nutmeg-Fixed allocation 2/5 5.3% 0.45% 0.24% 0.69% £ 69
Wealthify-Original Provisional 3.88% 0.6% 0.16% 0.76% £ 76
Moneyfarm-Portfolio 3 3% 0.75% 0.29% 1.04% £ 104
IG Smart Portfolio-Medium 7.4% 0.5% 0.21% 0.71% £ 71
Source: Boring Money

Then there are options for investors who want to decide which fund to invest in.

Low-cost indexes or tracker funds are set up to follow stock market indexes such as the FTSE 100 and other defined investment baskets, rather than being actively managed by professional managers.

Why are people not confident in investing?

According to Welsify, there are very few reasons why many people are worried about taking the plunge when it comes to investing.

The main reasons for the latest findings are:

-I’m always making traditional savings and I’m happy with their performance: 43%

-I don’t really understand the investment process: 38%

-Investment words are hard to understand: 22%

-No one knows who is investing: 21%

-I don’t know where to go to find out more about investments: 21%

-I find it difficult to understand the financial terms: 19%

-Lack of investment in schools / growth: 17%

As a result, they are usually very cheap to invest and can prove to be cheaper than the portfolio built by robo-advisors.

Some trackers can also invest in equity and fixed income combinations around the world and choose low-risk choices.

The most famous provider is Vanguard, an investment management giant.

Alternatively, diversification is one of the key beliefs in investment.

This means not putting all eggs in one basket, including the same geographic region, stock market, asset class, company type, etc.

For low-risk portfolios, for example, you can hold about half of your money, bonds or other fixed-rate assets in the equity market, 40%, and the remaining 10% in commercial real estate.

However, building such a portfolio can require a lot of work and research, procrastinating casual investors who are simply looking for a cash location that is not paying 0.1% interest. There is likely to be. You may want to hire an investment management company to help you.

Finally, there are funds and trusts designed to prevent investors from losing money over a specific period of time and generate positive returns over the medium to long term.

These include so-called “absolute return funds” or “defensive managed equity funds,” and stock market-listed mutual funds that play a similar role are also available.

“There was nothing to convince me to invest in stocks or Bitcoin.”

Theo Loyla says he will not invest in things like Bitcoin or commodities

Theo Loyla says he will not invest in things like Bitcoin or commodities

The 71-year-old Theoroira lives in Birchington and is retired, but runs line dance classes three times a week, as Covid-19 restrictions allow.

Loyla has a cash ISA and a bank savings account, as well as some premium bonds. He saved his life, usually for rainy days.

He said this was money:’When I was working, I donated to the company and two private pensions in addition to the state pension.

“I’m not happy with stocks and stocks, so I’ve never invested in them. I don’t think there’s anything to convince me to invest in stocks, Bitcoin, or commodities.”

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Almost three-quarters are not confident in investing

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