Stay invested, even if it feels compelling to do otherwise
Whatever the actual outcome of events, history has shown us the benefits of staying invested – during good and difficult times. Even after momentous events (such as the 9/11 attack in 2001 and the 2020 pandemic) markets have proved to be remarkably resilient and have continued their trajectory after the initial shock.
Studies have long warned against trying to time the markets. Recent data from J.P. Morgan (from January 2004–2024)¹ shows that missing just the 10 best days in the S&P 500 would result in less than half the returns of staying invested. Despite emotional urges to react to market fluctuations, evidence proves that staying the course is more beneficial.
Choose a diversified investment approach
Asset performance varies annually, making it hard to predict which will outperform. A globally diversified portfolio, including stocks and bonds, helps you adapt to downturns (like recessions or regional conflicts) and benefit from strong market conditions, ensuring better resilience and growth potential over time.
A recent survey by global investment bank Natixis² of institutional investors revealed that US/China relations, expansion of global wars and valuations (particularly in the US) were among the macroeconomic threats for 2025. Any number of these could have a greater or lesser impact than we expect – and cause different markets to rise or fall depending on the actual outcome.
A suitably diversified portfolio can help you to prepare for these eventualities.
Check how much you are paying to invest
Paying less money in investment fees can have a bigger impact than you might think – and therefore provide greater returns than you might expect. With a £500,000 portfolio, for example, you would have £70,000 more in your pocket after 10 years if you pay 1% in fees rather than 2% on your total investment costs (assuming 5% average returns).
Taking the time to review how much you pay in fees can make a meaningful difference to your financial outcome this year and every year. You can see the tangible impact of potential savings on our homepage – such as 4-5 years of extra retirement income, or 4 years of private school fees, or a significant contribution towards a deposit on a first home.
Ensure you have enough cash for emergencies
Your personal circumstances could change with little or no notice, often disrupting your financial situation. You may be facing a divorce or coping with illness, a change in employment or an unexpected bill – having cash on hand can help you to maintain your long-term investment commitments.
It might be an idea to have six to twelve months of income to hand. This can act as a useful buffer for unexpected expenses, so you don’t have to withdraw funds from an ISA or pension, for example, and can continue to enjoy the tax-free and compounding benefits of these wrappers.
Consider the benefits of financial advice
You may face an unexpected change of circumstances, need a second opinion or are unsure how to manage your money effectively. While tailored financial advice can bring you valuable peace of mind, studies by the International Longevity Centre (ILC) also show that those who take regulated financial advice are measurably better off a few years later.
A survey by Unbiased³ agreed with these findings. Among advised and non-advised UK savers, they found that the average person over 40 who took financial advice increased their savings levels by £98 per month due to the advice they received.
This resulted in a cumulative pension pot of nearly £64,000 more than those of savers who didn’t seek advice, based on an assumed investment growth rate of 5% per annum. Find out more about how qualified financial advice can be adapted to your unique circumstances.
Don’t forget about the impact of inflation
While inflation appears to be heading in the right direction, even the impact of relatively low inflation is rarely negligible. The impact of 2% inflation a year on £100,000 means the real value of your money (its spending power) would be around £82,000 after 10 years, or just over £74,000 if inflation is 3%.
We don’t know where inflation will settle over the next year so make sure you factor its effects into your long-term plans – then you can consider whether you need to take more investment risk to ensure you are on track to meet your goals.
Assess whether your financial plan is resilient
To ensure your financial plan remains relevant, assess whether it still aligns with your current and anticipated needs. Major life changes, such as marriage, children, or retirement plans, along with shifts in income or savings, are key reasons to review and update your financial plan annually.
A Financial Planning ‘MOT’ can help you to plug any gaps, ensure your money is working as hard as it could, and avoid common pitfalls you may not know about that could cost you dearly.
Powerful tools help you to visualise how your wealth could grow, and personalised information – including a 30-minute guidance call with an expert adviser – allow you to better understand how your choices could impact your financial outcome.
You can sign up for a Financial Planning ‘MOT’ here.
Please note, the value of your investments can go down as well as up.
Netwealth offers advice restricted solely to our services. We do not consider the whole of the market, nor offer advice in relation to tax compliance, insurance products, or the transfer of defined benefit pensions.
² Natixis
³ Unbiased
