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New Covid variants and outbreaks prove to be the biggest short-term concern for investors

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A survey conducted by interactive investor between 17 and 23 August asked 1,617 visitors to their site about their worries regarding their investments going forward.

The survey included questions on their immediate and medium-term concerns with the stock market, and any changes they would make to their investments as a result.

The survey found that more than half (57%) were in some way concerned about the short-term impact of Covid-19 on their investments.

21% claimed they were most worried about new Covid variants, 4% cited new waves as their biggest concern, and 32% responded that both were major concerns in the near future.

And as the country continues to emerge from the pandemic, investors aren’t quite so concerned about Covid-19 when looking further into the future.

Covid is not as big of a worry when looking at the medium term

When asked about the biggest threat to the stock market over the next five years, just 7% of respondents cited new variants and/or waves of Covid-19. Geopolitical tensions came out on top in this category, with 34% worried about their impact going forward.

Other concerns for the future included inflation (25%), climate change (12%), and China’s crackdown on private businesses (10%).

Despite these worries, 65% of respondents said that they will not change their investments in any way, and 20% said that they will actually increase their exposure to the stock market. Just 8% of investors are looking to reduce their exposure to the stock market as a result of these concerns.

Experts suggest maintaining your trust in the market and keeping yourself invested

As Myron Jobson, personal finance campaigner at interactive investor, says: “The dilemma facing investors in volatile markets is whether to stick or twist. Cash offers a great deal of peace of mind in volatile markets as its value doesn’t fluctuate […] but over the long term, the buying power of cash is usually eroded by rising price inflation.

“Ideally, even when markets are rough it is still worth keeping your money invested. History has shown that investing can yield better results than cash savings over the long term.”

Online robo-adviser Nutmeg supports this statement. Using market data between January 1971 and May 2020, Nutmeg found that investing for 10 years at any time during this period yielded a 94% chance of positive returns.

If you’re perhaps looking to invest for the future, my guide to the best trading platforms may help you decide how best to invest your money.

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