While it is clear that the market is a place for those seeking to grow their money over the long term, recent research has found that only 13 per cent of people plan to ‘buy the dip’ and increase the amount of money they have in the market in the coming months.
Almost double that (24 per cent) said that they will instead choose to increase how much they have in their normal savings account, which for most people will be offering minimal returns.
More concerningly, around 17 per cent of people do not think inflation will affect them at all – a clear misstep for anyone wanting to avoid savings attrition.
For those who are already invested, buying the dip with a view to holding for a period of five years or more could put them in a position to take advantage of market growth once it begins to rebound.
For those unsure about what to do with their money to beat inflation and manage the highs and lows of the markets, with-profits funds could be a consideration. This type of multi-asset fund uses a mechanism to smooth the ups and downs of market volatility to more evenly distribute returns generated during peaks and troughs.
Over the long-term, investors should see meaningful growth on their money, while being cushioned from any dramatic falls in the market.
What next?
For most investors with money in the markets, this will now be a waiting game.
Evidence suggests that markets recover over time, so many will be holding their nerve and having their patience tested.
Marc O’Sullivan is head of investments at Wesleyan
