Confidence or arrogance? Investors are backing British shares in buckets!

After record outflows in 2021, investor confidence seems to be returning as UK shares gain in popularity. Is this new confidence warranted?

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.

One English pound placed on a graph to represent an economic down turn

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

It seems like confidence in UK shares is surging. But is the market deserving of this optimism and support? Or is it the case that investors are becoming arrogant in their hopes?

Here’s what’s going on right now with UK investments, why investors think we’ve turned a page and how you can invest in the best British companies around.


What’s going on with British shares?

After record outflows of £5.3 billion during 2021, it seems like investors have changed their tune and are lapping up UK shares.

According to a recent survey of ISA holders by Freetrade and, one in five investors say they plan to increase their exposure to UK shares.

And, a paltry 4% say they will be reducing their UK investment holdings.

Why are investors more confident in the UK market?

Dan Lane, senior analyst at Freetrade believes that part of this British resurgence is to do with value investing and a change in sentiment towards US growth stocks. He says: “Maybe the UK market’s relatively cheap valuation is proving too hard to resist, or maybe the allure of US tech is waning slightly.

“Whatever the reason, the UK seems to be back on the menu in 2022. Investors will still need to maintain that long-term view though.”

He goes on to explain that volatility aside, investing your cash in the right way can help to beat back the nasty effects of inflation. He explains: “What is clear though, is leaving your money in a cash account is really just not an option for anyone hoping to generate meaningful returns. It doesn’t carry the same risks as investing but cash drag is real.”

Inflation might concern some investors, but that should make them look at their assets and how well-prepped their companies are to take charge of their own destiny regardless of what’s happening in the global economy.”


How can investors find good value UK shares?

This might sound like a difficult task, but finding great long-term investments doesn’t have to be a chore.

If searching through the financial reports from every firm on the London Stock Exchange isn’t your jam, that’s okay! Here are two quick and easy ways that you can find great value UK investments without all the headaches and legwork:

  1. Make use of The Motley Fool’s Share Advisor service, regularly dishing out excellent stock picks.
  2. Research and find an investment trust (for example Temple Bar) that focuses on UK value investing.

Where can you start investing in British shares?

Investing in UK firms and funds is now easier than ever. Your first step is to get yourself set up with a share dealing account.

Ideally, it’s worth holding your shiny new British investments in a stocks and shares ISA. This type of account has the incredible benefit of protecting your investment gains from tax.

Just remember that all investing carries a degree of risk, and you may get out less than you put in. So, make sure you’re on top of the rest of your finances and don’t invest more than you can afford.

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 assessed. Consider taking independent financial advice.

More on Personal Finance

Note paper with question mark on orange background
Personal Finance

Should you invest your ISA in a model portfolio?

Which model ISA portfolios offer both high performance and low fees? Hargreaves Lansdown, Interactive Investor and AJ Bell go under…

Read more »

Economic Uncertainty Ahead Sign With Stormy Background
Personal Finance

Is it time to exit emerging markets investments?

Investors may well be sitting on losses from emerging markets funds. Is it worth keeping the faith for a sustained…

Read more »

Personal Finance

Share trading? Three shares with turnaround potential

Share trading has been difficult in 2022, but which companies have turnaround potential? Jo Groves takes a closer look at…

Read more »

Man using credit card and smartphone for purchasing goods online.
Personal Finance

Revealed! Why Gen Z may be the savviest generation when it comes to credit cards

New research reveals that Gen Z may be the most astute when it comes to credit cards. But why? And…

Read more »

Environmental technology concept.
Personal Finance

The 10 best-performing sectors for ISA investors

The best-performing sectors over the past year invested in real assets such as infrastructure, but is this trend set to…

Read more »

Road sign warning of a risk ahead
Personal Finance

Recession risk ‘on the rise’: is it time for investors to worry?

A major global bank has suggested the risk of a recession in the UK is 'on the rise'. So, should…

Read more »

pensive bearded business man sitting on chair looking out of the window
Personal Finance

1 in 4 cutting back on investments amid cost of living crisis

New research shows one in four investors have cut back on their investing contributions to cope with the rising cost…

Read more »

Image of person checking their shares portfolio on mobile phone and computer
Personal Finance

The 10 most popular stocks among UK investors so far this year

As the new tax year kicks off, here's a look at some of the most popular stocks among UK investors…

Read more »