7 Tips on Savings and Investing During Times of Market Volatility

Rising food and energy prices can be scary, but you’re not alone, and there are things you can do to protect your future. But why are costs rising?

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Unrest in Ukraine

The attack on Ukraine continues to disrupt supply chains for food and gas across Europe, which causes a ripple effect into our homes and the stock market.

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Rising US rates

Then there’s the US rate hike, which in short will make loans more expensive for people and businesses. And when things get more expensive, the stock market changes.

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Recovering from Covid

And let’s not forget Covid. The pandemic changed the way the world works, and now that people are returning to their normal lives, supply and demand is having to once again adapt. 

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Now while you can’t control all of these things on your own (no-one can), you do have the power to take care of your own finances today, and for the future. We have a few simple tips.

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Michael Newman, COO

Don’t panic, be patient

Markets have taken a bit of a beating recently, I should know my portfolio has dropped in value as a result! But that is OK. I am a patient investor and history has shown me the longer I am invested, the more chance I have of seeing a positive return on my investments. Markets are forward-looking and they will to some extent price in the risk of an economic downturn before it actually happens so it is natural that we are seeing the markets behave like they are.

Unless you desperately need money to pay essential living expenses, there is little merit in selling investments now. So much horrid news has probably already affected the price of funds and shares.

Sit tight and invest regularly‍

History shows us it is absolutely normal for recessions to happen. The UK and Global economies go through good and bad cycles. The savvy investor should sit tight and continue to invest regularly. 

Regularly making investments into your ISA or General Investment Account each month means you pay a lower price to buy a share or ETF when markets are dropping and a higher price when they’re  on the up. Never try to time the market, none of us have a crystal ball!

One of the key contributors for financial health in the future is to save regularly. NuWealth provides you with the tools to do just that via the Auto Invest and Round Up functions in the app.

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James Bonwick, Head of Technology

“[...] always budget a small portion for yourself. I started this when I was a student living off my pretty much maxed out overdraft. Each month I would always ensure I had £5 to buy what I wanted so I didn’t feel guilty about buying a chocolate bar or something that wasn’t in the budget. As my financial situation improved, that amount increased so I always have a small pot each month that’s just a “I need this to feel better and its ok” pot”

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Nick Everitt, iOS Developer

“Try to invest in different types of companies. That way your portfolio can continue to grow even if there's a downturn in a particular sector.Think about whether a stock is risky before investing, does the business have a long track record of profitability or is it breaking into the market with a new idea? Both can be good investments, but think about how the risk would affect you personally before deciding how much money to invest. Every company in the stock market publishes an 'annual report' that you can read on the web. This is a great place to find out more about the business, and whether you like their future plans.”

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Marina Vogt, Head of Marketing

“For me, the cost of groceries is one of the expenses that’s increased most over the past few months, meaning there’s less left over for my savings, investments and other expenses, so I needed to find a way to manage this better. I made a spreadsheet with all essentials and the prices of each in the popular supermarkets, as well as loyalty card offers for the items, so I can plan my shop at the best price and quality. It’s helped me cut costs by a quarter, and it doesn’t take long if you stick to a consistent menu.”

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Ben Vickers, Product Owner

“Firstly I regularly review my outgoings and direct debits, I often accumulate small recurring payments that I don’t need anymore. Secondly with saving I set an aggressive amount to put aside, I then determine an amount of that I want to retain as liquid cash in case I need more money during the month. The rest I invest.

In terms of investing cash, I select / have selected a number of less volatile assets / funds that have been appreciating in value consistently such as Google for the main source of my investments, I invest in other assets that I have had positive experiences with in the past, like Tesla in which I know a lot about the company and brand. I then research new opportunities, using Motley fool, speaking to friends and reading online trends. I invest a smaller portion of my capital into these assets to diversify. Finally, I like to have a number of assets in my portfolio that pay dividends. I cross reference well performing assets that have a high P/E ratio to invest in, usually finding the initial ideas through Motley fool.

Further on the second point, I regularly need to send money back into my current account which I accept and is fine. The reason I put money aside aggressively is because I tend to be more mindful when my account balance is lower and I like to challenge myself to stick to the amount I set. Feel as though it helps me stretch my money further.”

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Oscar Dealtry, Product Owner (former)

“I do think auto investments are really powerful. I have money coming out of my account and going straight into investments as soon as possible after payday so that I never have to think about it. It’s taking a conscious, mindful action that allows you to unconsciously and automatically become a better saver”