There’s an age-old investment adage that promotes the value of spending time in the market as opposed to trying to time the market.
Unless you’ve got a crystal ball that tells you exactly when certain markets or asset classes are going to rise or fall, you’re probably better off investing smaller amounts on a regular basis, referred to as pound cost averaging. This smooths out any highs and lows, allows you to pay less for your investments on average and can make the journey less volatile, if indeed that’s your desired experience – some investors may enjoy the thrill of trying to time market highs and lows with a lump sum.
Behavioural finance experts often suggest that as humans, we’re predisposed to certain biases, including selling our investments when performance starts to drop off, despite all the expert evidence telling us not to do that; it just crystallises any losses instead of giving your investments a chance to recover.
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That said, investor confidence is at its highest in seven years despite a year defined by geopolitical instability, global trade tensions and market uncertainty.
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An annual study of investor behaviour and sentiment from research and communications businesses AML Group and The Nursery Research & Planning, The Investor Index 2026, showed investor confidence reaching a new high.
The index – a composite measure of investors’ confidence, sense of control and how informed they feel about their financial decisions – is back well above pre-pandemic levels, surpassing the previous high of the AI boom in 2024.
“What’s particularly interesting is how normalised uncertainty appears to have become for investors,” said Nicola Wright, insights director at The Nursery Research & Planning.
“Confidence is no longer closely tied to calm market conditions. Investors seem increasingly comfortable making decisions in a world where disruption and volatility are seen as part of the backdrop rather than temporary events.”
Several reasons are likely feeding that confidence, according to Jason Hollands, managing director at investment platform Bestinvest.
These include overplayed concerns that the US was facing a recession (which has not materialised) and markets (being forward-looking) appearing to discount the risk of the Middle East conflict as temporary, despite it lasting longer than many had first expected. He believes the over-riding reason behind many investors’ optimism is around AI and the exceptional levels of capital expenditure being ploughed into the sector.
Investing during uncertain times
Confidence is informed by several factors, including attitude to risk, life stage and level of experience and the amount of money you have.
The survey found 84% of investors (defined as having £10,000 or more invested) near or in retirement feel confident their savings and investments will be sufficient. Confidence is also higher among those already retired, as opposed to those in planning stages, and among those with more than £250,000 invested.
While the index showed UK investors were putting their money where their mouths were – 50% increased their investment amounts compared with last year while 40% maintained the same levels despite an uncertain backdrop.
That faith in the market is supported by a willingness to pay a premium for more likelihood of returns, a priority alongside decent track records and user-friendly products.
The choices UK investors are making also indicate optimism, favouring equity funds on the whole, with a rising demand for exchange-traded funds (ETFs). In keeping with regular savings strategies, considering a diversified, long-term approach – such as looking at reliable large caps, high-quality fixed income and some uncorrelated real asset exposure – should help many investors, whatever their time horizon, weather any storms.
Hollands said the danger of buoyant markets is the risk of overconfidence or being swayed by casual conversations with people ‘down the pub’.
“A lot of DIY investors start off enthusiastically but over time their interest wanes and they tend to forget about their portfolio,” he said.
Asset allocation – checking if any position sizes need rebalancing to bring the overall investments in line with your intended risk profile and preferences – is something many self-directed investors tend to overlook. Many get excited about fund or stock ideas rather than looking at the bigger picture, he added.
“Try not to over-react to the last thing someone told you but also make sure you’re reviewing your portfolio at least a couple of times a year, at the same cadence. Having a well thought-through asset allocation is really important, which can then anchor you to making better decisions.”
Are you thinking about investing but not convinced yet?
Intenders, perhaps unsurprisingly, are more cautious. The Nursery and AML define this cohort as those with over £10,000 in savings or over £2,000 in savings and an income over £40,000 but also likely to invest in the next two years. These people are keen to invest but still waiting for a ‘trigger’ event.
Tending to listen to banks, family and friends rather than professional advisers, they are more anxious across the board compared to investors. They see property and savings as safer bets than stocks and shares, with fear of loss and risk aversion their main barriers to getting started.
Of this group, 41% worry they will lose money and 37% say it feels too risky. Yet 44% say low-risk options or better knowledge would get them over the line.
“One of the main reasons that a lot of people who’d like to invest don’t do it is they’re nervous about putting their money in at the wrong time, and then suddenly seeing a significant drawdown in the value of their investment. That can stop them investing full stop,” explained Hollands.
He said the way to overcome that was to take the pound cost averaging approach.
“By just investing a little often regularly, it takes the emotion out of it and also means that across a year, you can expect to smooth out some of the ups and downs that you see in the short term.”
He also urges even experienced investors to consider the benefits of this approach – it’s not just for beginners.
How to start investing during uncertain times
Bestinvest is seeing novice investors increasingly choose readymade portfolios rather than trying to build their own from scratch, selecting funds themselves.
Readymade portfolios are essentially multi-asset funds designed to cater to a range of risk profiles, which have become common across most DIY investment platforms, which have evolved their offerings to serve customers of all levels of experience.
“Readymade portfolios provide inexperienced investors with effectively a ‘one-stop shop’ managed investment solution, through a diversified selection of underlying funds selected by a portfolio manager and an asset allocation approach that is periodically rebalanced to stay in line with the risk profile,” said Hollands.
He also said that passive funds had become more popular, with novice investors increasingly putting relatively small amounts via regular savings into global tracker funds.
