Why investors aren't holding out for the "right" moment during uncertain times

Investor confidence has increased above pre-pandemic levels as people realize that global events create opportunities rather than derailing investment plans

An old saying about investing emphasizes the importance of investing time rather than trying to time the market.

You're probably better off investing smaller amounts on a regular basis, known as pound cost averaging, unless you have a crystal ball that tells you exactly when certain markets or asset classes are going to rise or fall. If that's what you want, this can make the journey less volatile, smooth out any highs and lows, and allow you to pay less for your investments overall. Some investors might find it exciting to try timing market highs and lows with a lump sum.

Experts in behavioral finance frequently argue that humans are prone to certain biases, such as selling our investments when performance starts to decline, even though all the expert evidence warns against doing so because it only crystallizes losses rather than allowing your investments to recover.

Despite a year marked by geopolitical instability, tensions in international trade, and market uncertainty, investor confidence is at its highest level in seven years.

Watch the complete video here: The Investor Index 2026, an annual analysis of investor sentiment and behavior from research and communications firms AML Group and The Nursery Research and Planning, revealed that investor confidence had reached a record high.

The index, which is a composite measure of investors' confidence, sense of control, and level of financial decision-making knowledge, has surpassed the previous high of the AI boom in 2024 and is back well above pre-pandemic levels.

Nicola Wright, director of insights at The Nursery Research & Planning, said, "What's particularly interesting is how normalized uncertainty appears to have become for investors."

"Calm market conditions are no longer strongly associated with confidence. In a world where disruption and volatility are viewed as part of the background rather than as transient occurrences, investors appear to be more at ease making decisions."

According to Jason Hollands, managing director at the investment platform Bestinvest, there are probably a number of factors contributing to that confidence.

These include exaggerated worries that the US was going to enter a recession, which hasn't happened, and forward-looking markets that seem to dismiss the possibility of the Middle East conflict as transient, even though it has lasted longer than many had initially anticipated. He thinks AI and the extraordinary amounts of capital being invested in the industry are the main causes of many investors' optimism.

Investing in a period of uncertainty.

A person's attitude towards risk, their stage of life, their level of experience, and their financial situation all influence their level of confidence.

According to the survey, 84% of investors who are close to or in retirement and have at least £10,000 invested are confident that their savings and investments will be adequate. Additionally, those who have already retired and those who have invested more than £250,000 are more confident than those who are still in the planning stages.

According to the index, 50% of UK investors increased their investment amounts compared to the previous year, while 40% remained at the same levels in spite of the uncertain environment.

This trust in the market is bolstered by a willingness to pay more for a higher chance of returns, which is prioritized along with respectable track records and easily navigable products.

The decisions made by UK investors also show optimism, with a growing demand for exchange-traded funds (ETFs) and a general preference for equity funds. In keeping with standard savings strategies, many investors, regardless of their time horizon, should be able to weather any storms by taking into account a diversified, long-term approach that looks at dependable large caps, high-quality fixed income, and some uncorrelated real asset exposure.

According to Hollands, the risk of overconfidence or being influenced by casual conversations with people down the pub is the danger associated with booming markets.

"Many do-it-yourself investors begin with great enthusiasm, but eventually their interest wanes and they tend to forget about their portfolio," he stated.

Many self-directed investors often forget to check asset allocation to see if any position sizes need to be adjusted to align the total investments with your desired risk profile and preferences. He continued, "Many people get excited about fund or stock ideas rather than looking at the bigger picture."

"Make sure you're reviewing your portfolio at least a few times a year, at the same cadence, and try not to overreact to the most recent thing someone told you. A well-considered asset allocation is crucial because it can serve as a foundation for making wiser choices."

Are you considering investing but aren't quite sure?

As might be expected, intenders are more circumspect. This group is defined by the Nursery and AML as people who have more than £10,000 in savings or more than £2,000 in savings and an income of more than £40,000, but who are also expected to make investments within the next two years. These individuals are eager to invest, but they are still awaiting a catalyst.

They are generally more nervous than investors and prefer to listen to banks, friends, and family over expert advisors. Their primary obstacles to starting are risk aversion and fear of loss, and they view savings and real estate as safer investments than stocks and stocks.

Of this group, 37% say it feels too risky and 41% fear they will lose money. However, 44% believe that better knowledge or low-risk options would help them cross the finish line.

"Anxiety about investing at the wrong time and then experiencing a sharp decline in the value of their investment is one of the main reasons why many people who enjoy investing do not do so. That may completely prevent them from making investments," Hollands said.

He stated that using the pound cost averaging method was the best way to get around that.

"You can expect to smooth out some of the short-term ups and downs over the course of a year by simply investing a little frequently and consistently, which also takes the emotion out of it."

Additionally, he exhorts seasoned investors to think about the advantages of this strategy; it's not just for novices.

How to begin investing when things are uncertain.

According to Bestinvest, more and more inexperienced investors are choosing pre-made portfolios as opposed to attempting to create their own from the ground up by choosing funds on their own.

The majority of DIY investment platforms have adopted readymade portfolios, which are basically multi-asset funds made to accommodate a variety of risk profiles. These platforms have developed their offerings to accommodate clients with varying degrees of experience.

"With a diversified selection of underlying funds chosen by a portfolio manager and an asset allocation strategy that is periodically rebalanced to stay in line with the risk profile, readymade portfolios effectively provide novice investors with a one-stop shop managed investment solution," stated Hollands.

Additionally, he claimed that passive funds had grown in popularity and that new investors were increasingly contributing comparatively small sums to global tracker funds through regular savings.