Just 14 per cent of users on Vanguard’s UK personal investor platform traded in 2022, data from the company shows.
Of the 460,000 investors on the platform, 86 per cent did not trade at all, and 62 per cent traded just once.
Of those investors who did trade, most were moving a small percentage of assets within the same asset class, or into cash, the data showed.
Georgina Yarwood, investment strategy analyst, Vanguard, said the company was “delighted” to see clients embracing an “extremely disciplined” approach to investing.
“The research is clear that investors have the best chance of successfully achieving their financial goals by tuning out the noise, focusing on what they can control, and sticking to their long-term investment plans,” she said.
Yarwood added money is a very personal subject, and it can evoke emotions and associations that make it very hard to control investment behaviour.
“Certainly, a fear of loss or a desire for additional gain can disrupt the plans of even the most sophisticated investors,” she said.
The average daily trading volume as a percentage of clients was 0.09 per cent on the platform, and 96 per cent of all investors who traded last year did so no more than five times.
James Norton, head of financial planners at Vanguard, said in a post on the company’s website at the end of last year that it is important for investors to keep their discipline once they invest.
“Panic-selling when prices drop can hurt your wealth,” he said.
“Aside from turning a paper loss into a real loss, you could miss out on the market’s initial recovery, chastened and paralysed by the experience.”
Trying to time the markets is futile, he said, adding the famous phrase “time in the market is the most important thing, not timing the market.”
sally.hickey@ft.com
