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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
DIY investors are entering 2022 in a mood of constructive realism, recognising market risks, but also largely confident in their investments. Six in ten expect further covid restrictions in 2022, and a resurgence in the pandemic is the number one worry for investors as we head into the new year. Indeed, covid is seen as a greater risk than inflation, which makes sense seeing as the stock market provides some protection from price rises. Inflation comes a close second in the list of concerns for 2022 though, which shows investors are wary of price rises and the effect this may have on their portfolios. Global politics and high stock valuations are also cause for concern for some investors.
On the whole though, investors see the glass as half full rather than half empty. About 50% were confident or very confident about their investments in 2022, and around four in ten were neutral. That’s also reflected in forecasts for the Footsie, with two thirds of investors (65.7%) expecting the UK stock market to make further ground over the course of the coming year. Almost half of investors expect single digit returns in 2022, which suggests investors aren’t getting carried away, and are settling in for a more modest year for growth than 2021.
Investors are also becoming more attuned to ESG considerations, with four in ten (38.3%) saying these were going to play a bigger part in investment decisions in 2022. There’s already been a groundswell of interest in ethical funds in the last two years, and our survey suggests this isn’t going to abate in 2022. More than two thirds of investors also said they think there should be grater clarity over companies’ net zero plans.
The ESG agenda has developed so rapidly across the investment industry that the information available to investors is struggling to keep up. The FCA is formulating proposals on a new green labelling regime, expected in the first half of 2022, which should help make things a bit easier for investors seeking ESG investment options.
Source: Survey of 2,896 AJ Bell Youinvest customers between 6th and 10th December 2021
These articles are for information purposes only and are not a personal recommendation or advice.
Written by:
Laith Khalaf
Laith Khalaf started his career in 2001, after studying philosophy at Cambridge University. He’s worked in a variety of roles across pensions and investments, covering both the DIY and the advised sides of the business. In 2007, he began to focus on research and analysis, and has since become a leading industry commentator, as well as a regular contributor to the financial pages of the national press. He’s a frequent guest on TV and radio, and for several years provided daily business bulletins on LBC.
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