Holding cash vs investing

While we should all save some of our money in cash for our short-term goals, investing could serve you better for the longer term.

When markets are moving, it’s understandable that investors see advantages in keeping more of their wealth as cash. And, of course, it’s essential to have cash to hand as an emergency fund as well as important to keep cash for your short-term needs.

But history shows that stock markets tend to bounce back quickly from geopolitical crises like Coronavirus or the conflict in Ukraine. So, it could also make sense to stay invested not just when markets perform well, but during more challenging periods too. Pulling out when they fall could mean missing out when they recover. 

If recent history has taught us anything it's that equity markets have recovered from previous world events. The chart below shows the returns on equities (shares), cash and bonds over a 20-year period. 

Past performance isn’t a reliable indicator of future performance. The value of investments, and the income from them, can go down as well as up, and you may not receive the amount of your original investment.

Whether you’re an experienced investor or just finding out what investing is, we’ve got a range of articles to help you understand more about investing.

We regularly update our articles depending on what’s happening in the market so check back for future updates.