Roadmap for investors

Increased confidence portfolios will perform well in 2022

In 2021, there was a return to some form of normality across a vast majority of regions following successful vaccine roll-outs around the globe. But will the economic rebound continue in 2022, or be stymied by rising energy prices, higher inflation and further continued uncertainty brought about by the pandemic fallout?

Will we finally see material change in the way investors assess sustainable companies? What’s going to happen in 2022? To answer some of these questions, new research has revealed that investors have headed into this year feeling more optimistic about the year ahead.

Market fluctuations 

The findings show that nearly two-thirds (62%) of investors are confident that their portfolios will perform well in 2022. Twice as many investors are likely to add money into the stock market this year compared to last year.

Half (49%) of investors say that the market fluctuations since lockdown mean they are more likely to invest more in the stock market this year – a considerable increase since last year when just one in four (24%) said they are likely to.

Increasing involvement

Ethical investing considerations continue to grow, with twice as many investors this year saying they are conscious of what their money is funding (30% compared with 15%). The biggest challenges are seen as inflation (43%), interest rate increases (42%), new COVID-19 variants (34%) and the continued impact of Brexit (31%).

Along with the confidence in the market has come increasing involvement, with half of investors (49%) saying they have become more actively engaged in their portfolio.

Responsible investing 

The trend for socially responsible investing continues to increase, with almost one-third of investors (30%) saying they are now more conscious of the types of businesses and industries that they are funding – double the number (15%) of last year.

When it comes to geographical regions, 36% of respondents see the UK as offering the greatest opportunities, followed by emerging markets (32%) and the US (31%).

Inflation persisting

Investors are also conscious of the challenges their portfolios may face this year. With concerns about inflation persisting, people are right to look to the stock market as one of the ways they can preserve spending power over time. As always, diversification is key to more reliable investing success.

The future will remain unpredictable, as the last few years have demonstrated. As the world changes, the areas of the stock market that may prosper over the next five or ten years will not necessarily be the same as the previous decade.

Different sectors

The same is true of other investible asset classes, from government bonds to commodities – the leader board for the years ahead could look entirely different to the one in our rear view mirror.

To give investors’ money the greatest chance of growing, it is important to spread the bulk of it out across different sectors, regions and asset classes and leave it there for at least five years. For those investors that want to take a more speculative approach with their portfolio by backing individual companies they believe in, remember this is a higher risk approach, so do so with a smaller share of your money and see it as garnishing.

Want to ensure you keep your portfolio in balance?

As economic imbalances wrought by the pandemic begin to ease, some investors could be in for hotter-than-expected growth and inflation. To ensure you keep your portfolio in balance, please contact us to discuss your requirements, or to find out more please contact us for more information.

Source data:

[1] Censuswide data collected from two comparison surveys, run in December 2021 and November 2020. Both surveys have a representative sample size of 2,000 respondents. All respondents were 18+ and had previously invested money.

INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE.

THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED. PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE.