Investors must think long-term and hold their nerve during volatile market conditions, warns WMA
14th September 2015
Investing can help boost the economy and create growth and jobs
The current volatility of the world’s stock markets may make private investors consider jumping ship and selling their shares. However, the Wealth Management Association (WMA) warns that shareholders must think long-term if they want to reap the rewards of their investments.
The WMA points out that doing so allows individuals a way of actively participating in the actions of companies. It also helps them build wealth for their future – something that is vitally important when almost a third of the UK’s population are unsure whether their pension pot will be enough to live on once they reach retirement age . Enthusiasm for investment via the Stock Market has often fluctuated. However, figures recently revealed by the ONS show that individual share ownership has risen to 12 per cent of the market, an increase from the 10 per cent recorded in 2010 and 2012 .
Liz Field, WMA CEO, comments: “With global markets currently see-sawing, some people might think a dark cloud has formed and may be tempted to withdraw their money until calm returns.
“However, investors must hold their nerve and continue to plan for the future. Recent research has shown that those investors who stay calm and adopt a buy-and-hold approach will see better days and much better returns . With many shareholders investing their money as a pensions nest egg, or to pay for grandchildren’s education further down the line, it is vitally important that calm prevails.“
The ONS figures also reveal that foreign investors in UK-quoted stocks are dominant, with “rest of the world ownership” standing at 54 per cent at the end of 2014 .
Liz adds: “What we really want to see is UK retail share ownership increasing. Private investors are actively engaged in the country’s economic performance, as they have a stake in the free market economy which is a huge boost to the UK. The WMA has been calling for the government to help create a culture of investments and savings in this country – and that can only be achieved by educating the public and making investment easier to understand.
“Ultimately, the key role for corporate Chairmen and CEOs is to maximise shareholder value in their businesses by keeping them profitable and successful. In doing this they must respond to the interests of the shareholders who own the companies, including private individuals, partly by sharing company profits with them through dividend payments. The wider the range of investors, the wider the interest in company success and the greater the pressure on management to ensure accountability for what they achieve to these owners.
“A large number of people in the UK have little or no investments or savings, but investing long-term in real assets can help people retire more comfortably or better provide for their families. It’s an often held misconception that investing in stocks and shares is something only possible for the rich but it is an option which is firmly open for all.”
Notes for Editors
About the Wealth Management Association (WMA)
- The Wealth Management Association (WMA) is a trade association that represents 186 wealth management firms (full members) and associate members who provide professional services to our full member firms.
- WMA members firms look after over £670 billion of wealth for over 4 million retail investors.
- WMA full members deal in stocks, shares and other financial instruments for individuals, trusts and charities through a range of services spanning execution only, advisory and discretionary fund management.
- The WMA exists to support its members and their clients in the following ways:
- To be an advocate for the sector with governments, regulators and the wider financial services community;
- To influence policy and also decision makers within the wider sector to the benefit of WMA members and their clients;
- To research and provide definitive information about the sector as required for members and in support of the influencing and advocacy objectives;
- To be a thought leader, to lead and stimulate debate and make members aware of emerging trends; challenging and provoking change.
- Facilitating the sharing of good practice, enabling the membership as a whole to benefit from the latest developments affecting the sector as well as providing support to enable them to develop good prescribe and overcome challenges.
- WMA firms operate across more than 580 sites, employing over 32 000 staff.
- These firms also run over 5.5 million client portfolios and carry out over 20 million trades a year.
If you would like further information on this release or other press matters please contact:
- Sheena Gillett, Head of PR and Communications on 020 7011 9869 or at [email protected]
- Emelie Forsberg, Events, PR and Communications Assistant on 020 7382 0382 or at [email protected]
Switchboard: 020 7448 7100