Four in ten investors regret not starting investing earlier, research from Fidelity International has revealed.
According to Fidelity’s study of 1,000 UK investors, other common regrets include not staying consistent with contributions (19%) and not making better use of tax-efficient accounts such as ISAs (17%).
When asked what advice they would give to someone new to investing, the most common response was to start as early as possible (38%).
This was followed by avoiding panic during times of volatility (28%), focusing on long-term investing (26%), seeking professional advice (24%) and staying invested rather than dipping in and out (23%).
Marianna Hunt, personal finance expert at Fidelity International, said: “What’s striking from this research is how closely the advice investors give reflects their own experiences. Many say they wish they had started earlier, invested more regularly and made better use of tax-efficient accounts like ISAs.
“In periods of uncertainty, it’s understandable that some investors may feel cautious. While markets will always move in the short term, focusing on what you can control, such as when you start, how regularly you invest and how long you stay invested, can help build confidence over time.
“You don’t need to invest large amounts to get started, what matters most is building good habits early, contributing regularly and giving your money time to grow.”
Analysis by Fidelity highlights the benefits of starting early. It looked at two investors who both invest £1,000 a year for 30 years, with one beginning at age 25 and stopping at 55, and the second starting at age 35 and continuing until age 65.
Despite investing the same total amount, the first investor ends up with £120,000 by age 65, while the second investor has £75,000, a difference of £45,000, illustrating the benefits of compounding, Fidelity said.
The research also underscored the importance of long-term investing, with 26% of investors advising others to think long term and 23% saying they should stay invested rather than dip in and out of the market.
Fidelity’s analysis shows how time in the market has historically helped reduce the uncertainty of investment outcomes. Based on historical S&P 500 data, one-year returns have ranged from around -43% to +60%.
Over five years, this range narrows to approximately -7% to +29% while over 20 years, even the worst-case scenario would have delivered positive returns of 5% a year and the best scenario would have delivered returns of 18% a year.
Hunt added: “When markets feel unpredictable, it’s natural to be uncertain about the next step or want to delay investing altogether. However, our research shows that many investors later wish they had started sooner or stayed more consistent.
“The analysis highlights the value of time in the market and the difference it can make over the long term.
“While markets will always fluctuate, taking a long-term view and investing consistently can help investors make the most of opportunities and feel more confident about their financial future.”
Main image: micheile-henderson-lZ_4nPFKcV8-unsplash
