Data revealed, that 18% of those with £250k or more in investable assets had 40-60% of these assets in cash, or in monetary terms, at least £100k. Surprisingly, this same group had also benefitted from the lockdown, revealing 35% had more money to invest than usual. During periods of stock market volatility, it’s totally understandable that cash feels safe. But in the long run, it can actually do more harm than good if you are looking to yield fruit from your efforts. That’s because, if you are leaving large amounts of money sitting in cash, you could be losing out on substantial returns over the long run.
The rates of return on cash accounts are extremely low and have plummeted further still since covid appeared, with the average currently below the rate of inflation. Research also revealed that the same group are aware of the opportunities, as 42%, the largest of any wealth group, think there are good opportunities in the current market, whereas 29% would like to move their cash to investments but don’t know which investments, or where to begin. Of the same group, 37% now plan to be more active with their investments overall.
