More than half (56%) of DIY investors increased their exposure to cash in the three-month period between February and April 2025, according to Charles Stanley Direct.
The market uncertainty around President Trump’s tariffs, and the volatility which followed ‘Liberation Day’ prompted investors to take action, the firm said. The number of investors who increased their exposure to cash jumped 10% compared to the number who increased their cash holdings following the Autumn Budget (46%).
The trend was more prevalent among younger investors, with 65% of millennial investors and the same number of Gen Z investors increasing their cash exposure, compared to 44% of Gen X and 31% of Baby Boomers.
However, Charles Stanley Direct warned that holding too much cash for too long could be a costly mistake, with investors potentially missing out on higher returns compared to other investments, particularly when trying to keep pace with inflation and compound interest takes effect.
Other alternative investments also found favour with DIY investors amid the market volatility. Nearly half (48%) increased their exposure to gold and 46% increased their exposure to property.
Rob Morgan, chief investment analyst at Charles Stanley Direct, said: “During times of uncertainty, keeping funds liquid or in lower risk investments can be beneficial to help weather a market storm. This holds true if we look at how Trump’s Liberation Day saw over £4 trillion wiped off the stock market overnight.
“While investors may have dashed for cash to find a temporary safe haven for their investments, it’s not generally something that holds as part of a long-term investment strategy. Fundamentally, in times of market volatility investors need to keep calm, stick to their investing plans, and keep focussed on the fact that sharp short-term moves should pale into insignificance over multiple years and decades.”
Morgan added that some investors may look to capitalise on market turbulence.
“Through holding safe investments, such as cash or short-term bond funds, these can be quickly sold and reinvested into other areas at opportune moments. However, market timing is notoriously hard and tends to require luck as well as judgement. For an emergency fund and for any planned spending there is no alternative to cash. But those tempted to park large amounts of their ‘long-term’ money in cash risk missing out over the longer term.”
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