Almost 40% of investors who have withdrawn money from the markets regret it
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Many investors who withdrew money from the stock market last year are now regretting their decision.
According to a study by MagnifyMoney, about 38% of investors said they sold stocks in the past year because of a current event. Of this group, 40% said they wished they had invested their money. The online survey of more than 1,000 US consumers was conducted April 15-20.
The survey found that younger investors were more likely to panic sell. Nearly 70% of Gen Z investors, along with 57% of Millennials, withdrew money from the market. At the same time, 49% of men sold stocks due to a negative event, compared to 24% of women.
“Time is the ultimate weapon when it comes to investing,” said Matt Schulz, chief credit analyst at LendingTree. “This gives younger investors a huge advantage over their older peers.
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“Unfortunately, however, Gen Z and Millennials risk forfeiting that advantage by taking their money out of the market during tough times.”
The best move for young investors is to focus on the future and leave their money where it is, Schulz said.
“Ride the wave and trust that better times are ahead because history has shown they almost always are when it comes to the stock market,” he said.
Various events spooked investors even more
Certain recent events have raised concerns among investors, according to the survey. Overall, inflation has been the biggest concern for US consumers over the past year.
Americans are also concerned about the coronavirus pandemic, economic policy and the war between Russia and Ukraine.
Emergency savings and how much money people are willing to invest were the most affected by current events last year, according to the survey. People have also reassessed their living conditions as property prices have soared and are reconsidering the level of risk they are willing to take when investing.
How to Avoid Regret
In general, to guard against too much regret when investing, experts recommend starting as early as possible and devising a plan for your money to grow over time.
“They want to start as soon as possible,” said Shelly-Ann Eweka, senior director of financial planning strategy at TIAA. This is because over time you will reap greater benefits from compounding, which is the interest earned on your invested money.
Some people may put off investing to prioritize other financial goals, which Eweka warns against.
https://www.cnbc.com/2022/05/16/nearly-40percent-of-investors-who-pulled-money-out-of-markets-regret-it.html Almost 40% of investors who have withdrawn money from the markets regret it