With many worried about a stock market crash, there’s one group of investors that are remaining confident: stocks and shares ISA investors. New research from Freetrade and InvestingReviews.co.uk shows that almost a third (31%) of ISA investors plan to up their contributions in 2022. Only a small number (2%) said they expected to scale back their investment plans.
One young investor, Josh Paradise, 26, from Swindon, is feeling bullish. He’s still aiming to build his investment wealth and retire early, despite stock market volatility.
“Why I’m not worried about a stock market crash”
Josh Paradise isn’t worried about a stock market crash because his plan is all about long-term investment.
He’s holding his nerve with current market volatility. He explains, “as my investment experience has grown, I’ve learned to handle the fact that markets go up and down.” He adds, “volatility doesn’t phase me as much as it did when I first started.”
As a long-term investor, he’s committed to maintaining his current level of contributions. He’s investing £250 per month in his Freetrade Stocks and Shares ISA.
Josh is also aiming to diversify his portfolio. He’s planning “to make sure I have a diversified enough portfolio to help handle market volatility.” Holding a variety of assets in different classes and geographies can counteract some of the stock market’s volatility.
He’s also sticking to his long term investments aims. He explains, “For me, it’s all about staying true to your investing goals, no matter what the market is doing. The main thing is time in the market, not timing the market.”
“I’m aiming for a green portfolio”
Like many investors, Josh is slightly adjusting his investment portfolio and focusing on green energy. The green investing movement is now estimated to be worth £30 trillion globally. And it’s expected to grow rapidly in the coming years. Many investors have adjusted their choices amid climate change concerns, energy security worries and spiralling oil prices.
He believes geopolitical events will ultimately reduce the West’s reliance on harmful fossil fuels and that the case for a shift towards renewables is fast becoming overwhelming. “Looking ahead, I really see governments moving towards green energy quicker than originally intended. It will mean they don’t have to rely on imports from abroad.”
Josh adds, “whilst their prices might not be where I’d like them to be right now, I still feel like they are the right investments for the future and will eventually benefit me in the long run. Currently, I have investments in alternative energy sources such as ITM Power and Plug Power, as well as investments in electric vehicle companies NIO and Tesla.”
Josh Paradise’s plan for several income streams
But Josh isn’t just relying on the stock market for the future. As well as his stocks and shares ISA, he also aims to add a couple of rental properties to his investment portfolio.
He explains, “My ISA goal is to achieve financial freedom for when I retire. I’m currently paying into a workplace pension.” But he’s not stopping there. He intends “to get a buy-to-let property or two in the future so I’ve got as many sources of income as possible.”
Should ordinary investors worry about a stock market crash?
If you’re worried about a stock market crash, then how should you approach your investments?
According to Dan Lane of Freetrade, “it’s important to have a sufficiently diversified portfolio and continue to focus on the long term.”
Dan feels that investing regularly can help reduce investment risk. That’s because “pound-cost averaging through buying investments regularly in small amounts can also help to smooth out volatility.”
If you’re extremely nervous about any investment risk, then opting for cash could be more suitable. But you could miss out on potential rising stock market prices in the future.
Dan Lane explains, “with equity risk comes the opportunity to outperform cash and inflation over the long term. History tells us stock markets do go up over time.”
Simon Jones, CEO of InvestingReviews.co.uk, adds, “Investors with long-term horizons shouldn’t allow themselves to be rattled.” He explains, “Those who retreat from the market at the first sign of volatility risk losing out when conditions improve later.”
Where can you invest in a stocks and shares ISA?
There are only a couple of weeks left to use your £20,000 stocks and shares ISA allowance. If you want some ideas about where to invest, then check out our top-rated stocks and shares ISAs. Even saving a small amount each month can help you build towards a comfortable retirement.