Stock markets around the world have fallen sharply due to the covid-19 pandemic but UK retail investors are seeing profit in a long-term strategy.
Exchange-traded fund (ETF) provider GraniteShares surveyed 1,025 Brits and found 70% believe the fall in the FTSE 100 means it now represents a strong investment opportunity because many of the stocks are “hugely undervalued”.
Some 21% strongly agree with this view.
Despite the apparent belief that there are gains to be made, the research revealed that 78% said they have taken no action with their investments over the past four weeks.
Just over one-in-five UK retail investors (22%) have made adjustments to their portfolios.
Given the choice to select multiple responses, 8% said they have cashed in some of their investments, 6% said they have sold and bought new stocks and 11% said that they have invested more in the stock market for long-term profit.
A small number of retail investors (4%) said they have made money from the stock market falling by shorting stocks.
Sitting on their hands
Will Rhind, founder and chief executive at GraniteShares, said: “Since the coronavirus crisis started, we have seen huge volatility in the FTSE 100 and other stock markets around the world.
“Our research shows that while some investors have responded by adjusting their portfolios, most are just sitting on their hands through this roller-coaster ride of volatility.
“With advances in asset management and fintech, investors now have more tools to take control of their finances, and sophisticated investors can now more easily hedge against falls and boost returns from any recovery.”