Savings outperform stocks and shares

Research by Thomson-Reuters Lipper, commissioned by the BBC, has found that savers investing their money in savings accounts have benefited rather than investing in UK stocks and shares.

The research found that if £1,000 was invested at the start of the decade, it would now be worth £1,094 in an average UK unit trust compared to £1,358 in a typical savings account.

The findings have resulted in questions about long-term investments. However, according to Jane Lowe, director of markets at the Investment Management Association, using the same calculations but prior to July 2007, shares would have easily outperformed savings accounts.

Timing is crucial to how much money can be made, according to industry experts. For example, long-term shares would outperform a typical savings account, according to the fund management industry.

Those wanting to achieve a quick profit should not invest in stocks and shares, advises Ms Lowe. It is a longer term question of when you are putting your money in and when you are taking money out, adds Ms Lowe.

Justin Urquhart Stewart, of Seven Investment Management, explains that it is about time in the market, not timing the market.

Mr Urquhart Stewart advises that investors have a broad investment portfolio spread across a number of countries and asset classes, including both equities and cash.

Discuss this in the Finance Markets forums

Story link: Savings outperform stocks and shares