Guides
Worries and myths
The fears that stop people investing, checked against 150 years of UK data. Some turn out to be overblown. Some are fair, and the guides say so.
Start with Will I lose money investing?, which sets out the odds from 150 years of UK data.
Each guide takes one worry, states it fairly, then checks it against the longest UK record available: shares and cash from 1871 to 2020 for the long-run questions, the FTSE 100’s daily prices for the 2020 crash, and the rules and official guidance for the questions about safety and tax. Where a worry is justified, the guide says so and shows what you can do about it. None of this is a prediction. It is the record, laid out so you can judge the odds for yourself.
Seven common worries, and what the evidence shows
The first four are checked against the same long-run UK data, from 1871 to 2020, with the working shown. The next two are answered from the rules and official guidance. The last uses the FTSE 100’s daily prices from the 2020 crash.
- The worry
“I could lose everything.”
What the data showsUK shares fell in about one year in four. But over twenty years they lost buying power in just 2 of 131 periods.
Will I lose money investing? → - The worry
“Cash is the safe option.”
What the data showsCash lost buying power in 50 of 150 years. £100 kept in banknotes from 1970 lost 92% of its value.
What inflation does to cash → - The worry
“Markets are at a record high. I should wait.”
What the data showsAbout half of all years end at a record high. After one, shares still beat inflation over ten years 85% of the time.
Is now a bad time to invest? → - The worry
“A crash would wipe me out.”
What the data showsUK shares have had 8 falls of 20% or more after inflation. Each recovered, after 3 to 13 years.
What happens in a crash → - The worry
“I should clear my mortgage before I invest anything.”
What the evidence showsOverpaying earns a guaranteed return equal to your mortgage rate. Investing might earn more, with no guarantee. The right mix depends on your rate, your safety net and your timeframe.
Pay off the mortgage or invest? → - The worry
“If my platform goes bust, I lose everything.”
What the rules sayPlatforms must keep your investments separate from their own money. If a firm fails and something is missing, the FSCS can pay up to £85,000.
Are ETFs safe? → - The worry
“If the price drops, I've lost my money.”
What the data showsOnly if you sell. £1,000 in a FTSE 100 tracker in March 2020 was down 14% a week later, and up 15% a year later.
When do you actually lose money? →
Coming next
New guides arrive every week.
- Is investing just gambling?
- What if I need my money back quickly?