How do you invest?
Do you plan for long-term growth, or aim to achieve short-term gains?
According to Schroders’ Global Investor Study, released in mid-December, UK investors are more focused on short-term than long-term gains in the current climate.
Amongst investors who class their investment knowledge as “expert”, 80% have already made changes to their portfolios to combat rising inflation – a figure that stands at just 29% for “beginner” and 27% for “rudimentary” investors.
But how does the UK compare with the rest of the world?
UK vs. global approaches
While 54% of global investors stated in the study that they are focused on short-term gains, this figure is significantly higher in the UK. Here, three-quarters of investors are prioritising the short term over the long term as a result of soaring interest rates and increased living costs.
However, the UK is more optimistic than other nations about 2023’s potential returns. The current anticipation is that these will reach levels of 11.26% over the coming five years – 0.48% higher than when the study was conducted in 2021.
This year it’s Japanese investors who are least confident about their returns, anticipating growth of just 8.19%, while South African investors expect returns of 16.05%.
The rise of advice
As a result of the turbulent market conditions, more and more investors plan on turning to professional advice to help them manage their portfolios. 39% of global respondents have said that they are more likely to talk to a financial advisor about their investments, in the wake of interest rate rises – and even more experienced investors are seeking active fund management.
51% of “advanced” investors and 63% of “expert” investors expressed a greater interest in actively managed funds compared with six months ago: results which come on the back of the FCA’s proposals for a new, simplified advice regime.
With diversification, saving more and spending less also highlighted as future behaviours in the Schroders study, it appears that many investors are looking to make changes to the way they invest, rather than simply trying to ride out the storm.
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