For most people, investing sits alongside competing priorities – careers, mortgages, family life. With research showing that one in three Brits don’t feel they know enough about investing, it’s only right to acknowledge that’s entirely normal. It shouldn’t be a barrier.
Myth vs mindset: timing the market
The heritage behind the ‘sell in May’ adage is that historically, markets have sometimes underperformed over the summer months. While there have been periods where this may be true, relying on seasonal patterns to guide long-term decisions is irrelevant. Markets are influenced by a vast range of unpredictable factors, from economic data to global events.
More importantly, trying to time when to enter and exit the market often backfires. Missing just a handful of the market’s strongest days, something that can easily happen when reacting to short-term noise, can significantly reduce long-term returns. That’s why seasoned investors often focus on a different principle: time in the market, not timing the market.
Behaviour matters more than seasons
What tends to have a greater impact than any seasonal trend is investor behaviour. Emotional decision-making – selling during downturns out of fear or piling in during strong markets out of overconfidence – can erode returns over time.
Recent investor research highlights this clearly. Many investors admit to mistakes such as taking too little risk or reacting emotionally to headlines. Those without professional advice are more likely to hold excess cash, feel less confident and make reactive decisions. In contrast, those with guidance tend to stay invested, contribute more regularly and maintain a clearer long-term strategy.
This speaks to a key truth: investing success isn’t just about knowledge – it’s about discipline.
You may already be investing
It’s also worth noting that many people are already investors without fully realising it. If you’re contributing to a workplace pension, your money is likely to be invested in markets. That means you’re already benefiting from long-term growth potential and compounding, even if you’ve never actively chosen funds yourself.
For those who haven’t yet started investing outside of pensions, the same principles apply: you don’t need to know everything to begin. What matters is having a clear purpose and a plan.
Getting the fundamentals right
Rather than focusing on short-term trends or market timing, a more effective approach is built on a few core principles:
- Purpose : what are you investing for? Retirement, financial independence, helping family?
- Time horizon: in your 30s and 40s, you’re likely to still have years, if not decades, to invest, giving you time to ride out volatility
- Asset allocation: spreading investments across different asset types helps balance risk and return
- Diversification: avoid over-concentration in any single investment, geographic region or sector
- Understanding risk: accept that markets will rise and fall, but historically trend upwards over time
- Behaviour: staying invested and avoiding knee-jerk reactions is crucial.
Acting your investor age
At this stage of life, you’re often in or close to your peak earning years, which makes it an important time to build momentum. There may be competing financial demands, but maintaining regular contributions, even if modest, can make a meaningful difference over time.
This is also where reviewing your approach becomes valuable. Are your investments aligned with your goals? Are you taking an appropriate level of risk? Small adjustments now can have a significant long-term impact.
The bottom line
Seasonal sayings like ‘sell in May’ shouldn’t drive your decisions. The evidence consistently points to a simpler, more effective approach: get invested, stay invested and remain focused on your long-term goals. With the right support and a disciplined approach, investing can become a powerful tool to help you achieve them.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.