Almost a quarter of Brits think cash will be the best performing investment in 2022, but are they right?

New research reveals that almost a quarter of Brits think cash will be the best-performing investment in 2022. Are they correct? Sean LaPointe takes a look.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Chalk outline of two arrows pointing in opposite directions

Image source: Getty Images

If you are looking to grow your money in 2022, you have probably wondered which classes of investments promise the best returns. After all, there are so many options to choose from today, including property, cash, stocks and shares, commodities and even relatively new options such as cryptocurrencies and NFTs.

Now, new research from Finder.com has revealed Brits’ top investment choices for 2022. One of the most interesting findings from this research is that almost a quarter of Brits think cash will be the best performing investment in 2022. So, why do so many Brits think that? And are they correct? Let’s take a look.

[top_pitch]

Which investments do Brits think will perform best in 2022?

Finder surveyed 2,001 Brits to find out their investment preferences for 2022.

Property came out on top with 30% of Brits naming it their top investment option for 2022. Given that the property market has been on fire over the last two years with prices reaching record highs, it’s hardly surprising.

Cash takes second place. Despite rising inflation, 24% of Brits believe cash will be the best performing investment in 2022. Young Brits, in particular, are more likely to favour cash, with more than a quarter of those aged 18-24 and 24-35 naming it as their top investment for 2022.

Comparatively, only 19% of those aged 65 and above think cash will be the best investment in 2022. In fact, older Brits are likely to invest in shares and ETFs more. For example, a fifth of those aged 5564 and 65+ think that stocks will be the best investment for 2022, compared to just 17% of those aged 18-24.

Here’s the complete list of Brits’ preferred investment choices for 2022:

What do you think will be the best investment in 2022?

Property

30%

Cash

24%

Stocks, shares or ETFs

17%

Cryptocurrency

15%

Bonds

5%

Commodities

5%

NFTs

4%

Why do so many Brits think cash will be king in 2022?

Zoe Stabler, investment specialist at Finder, says that the study’s findings on cash are quite surprising, especially in light of soaring inflation (which has recently hit a 30 year high of 5.5%).

Of course, it could be that investors are looking for a safer haven for their money given recent market turbulence and uncertainty. The Bank of England’s decision to increase the base rate to 0.5% may have particularly incentivised many to invest in cash.

Regardless, the reality is that savings rates remain very low – far below inflation. The real value of your cash savings is therefore still at risk of being eroded.

[middle_pitch]

Can stocks provide better value?

If you intend to hold your money for a long time, in all likelihood, you’ll end up with a considerably more valuable portfolio if you put the money into investments such as stocks and funds rather than cash.

More importantly, history shows that over a long period of time, stocks have delivered returns that have typically beaten inflation. That said, of course, past performance is not an indicator of future results.

Investing involves risk and there is no guarantee of positive returns. As a result, you could end up with less than you put in.

So what’s the best way forward for Brits?

It’s quite simple, actually.

According to MoneyHelper UK, for your short- and medium-term goals (goals with a timeline of five years or less), the general rule is to save your money in cash savings accounts. Your savings will grow slowly and will be more vulnerable to inflation, but at least they will be safe and you will not get back less than you put in.

For your long-term goals, however (those with a timeline of more than five years), you should consider investing your money. As mentioned, stocks tend to deliver much better returns than cash over the long term.

The value of your stock market returns can be boosted by investing using a tax-efficient investment vehicle such as a stocks and shares ISA, where any income or growth is tax-free. You can put up to £20,000 in a stocks and shares ISA every year.

If you are interested in learning more, check out our list of top-rated stocks and shares ISAs.

Of course, before putting money into any investment, don’t forget to do your homework to see if it has long-term potential.

Please note that tax treatment depends on the individual circumstances of each individual and may be subject to future change. The content of this article is provided for information purposes only. It is not intended to be, nor does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

More on Uncategorized

Light bulb with jester hat perched on top
Uncategorized

New look. Same Foolish investing.

Maybe you already noticed — things are looking a little different around here. At the top corner of our site,…

Read more »

Light bulb with jester hat perched on top
Uncategorized

We have some exciting news!

You could even say it’s 25 years in the making...

Read more »

Uncategorized

Tesco PLC Is Doing All The Right Things And I’m A Buyer

I’m a big fan of how Tesco PLC (LON: TSCO) is turning itself around and here’s why…

Read more »

Uncategorized

What’s Stopped Me From Buying Gulf Keystone Petroleum plc Today

Royston Wild considers the investment case for Gulf Keystone Petroleum plc (LON: GKP).

Read more »

Uncategorized

Dow Futures Fall Ahead Of Durable Goods Report

Stock index futures ahead of this morning's durable goods orders report indicate that the Dow Jones and S&P 500 may…

Read more »

Uncategorized

What’s Stopped Me From Buying BHP Billiton plc Today

Royston Wild considers the investment case for BHP Billiton plc (LON: BLT).

Read more »

Uncategorized

3 FTSE Shares Hitting New Highs: National Express Group PLC, Brammer plc and Hilton Food Group plc

National Express Group PLC (LSE: NEX), Brammer plc (LON: BRAM) and Hilton Food Group plc (LON: HFG) set new records.

Read more »

Uncategorized

Should I Buy Legal & General Group Plc?

Legal & General Group plc (LON: LGEN) has seen its share price rise 50% in the last 12 months, Harvey…

Read more »