INVESTING IN A VOLATILE MARKET - LIKE NOW

The UK FTSE100 stock-market index rose by more than 3% today on the news of the 2 week ceasefire in the Iran war. This is a large positive correction of the index in just one day after a short period of falls over the past couple of weeks. 

This is a clear sign that we live in the times of volatile stock-markets. Whether or not this rise in the markets will continue, depends on the negotiations between Mr Trump and the Iranians who have only just realised the power they have over the Hormuz Strait, what should be, an International Seaway. With Mr Trump involved, it is feared that volatile markets will continue throughout the period of the cease fire, protracted negotiations and into the foreseeable future. 

Looking at the performance chart above of the FTSE100 index over the past 2 years, there are two major negative blips in its steady progress upwards. The first in March 2025, Trump standing on the White House lawn presenting his new Trade Tariffs which caused panic throughout world markets and the second one, this March 2026 with the Iran War.  Both caused by the actions of Mr Trump. 

The best way to invest in a volatile market such as now is to invest on a regular basis, say monthly.  This is called Pound Cost Averaging (PCA) which is an investment strategy where you invest a fixed amount of money at regular intervals (e.g., monthly) rather than a single large lump sum. 

By doing this, you naturally buy more units of an investment when prices are low and fewer when they are high, which can result in a lower average cost per unit over time. Markets rise and fall, but by investing bit by bit, you avoid putting all your money in when prices might be at their highest. Instead, you spread the risk and take advantage of lower prices when the market dips.

Above is a simplified diagram of investing a regular amount over the next 12 month period for this current tax year ISA allowance of £20,000.  This could be split into 12 monthly amounts £1,666 per month for the next 12 months to reach your £20,000 maximum ISA allowance.

If you see a buying opportunity along the way you can simply invest a lump sum to reach the ISA allowance early.

If you are wishing to invest this tax year's £20,000 ISA allowance and you are concerned with investing in a volatile market - like now, then please contact us to discuss the best arrangement to meet your requirements. 

Enjoy the sunshine, while it lasts!

RAY