Martin Lewis investment advice after ‘stock price bubble’ worries | Personal Finance | Finance

Martin Lewis has spoken out on whether people should stay invested or turn to savings amid stock market turmoil caused by conflict in the Middle East. Markets have been turbulent since the US and Israel attacked Iran, and various proposed peace plans have seen markets rise and then fall as hopes fade.

The personal finance expert was asked by some viewers on the ITV Money Show Live this week whether it would be better to shift their cash elsewhere. He explained that volatility in itself is not a bad thing and offered important advice: Think long term.

Mr. Lewis said: “Now look, there are ups and downs. That volatility is still there day by day. But over a 10-year period you generally expect these major indexes. So they track a lot of different stocks. It’s not about one stock. A lot of different stocks will go up over time. And if you don’t invest, if you have money, you’re missing out on that level of growth.”

Co-presenter Jeanette Kwakye said: “There are two questions here. The first one comes from Angela. She asks if the current market volatility is continuing. How does it affect stocks and shares? Is it better to wait or continue in the hope that shares will rise at some point? And then we hear this from Colin. “I keep hearing that we are in a huge stock price bubble that is likely to burst eventually. If that’s the case, then shouldn’t we be hoarding cash instead?’”

Martin explained how the war has affected things: “Of course the situation in the Middle East continues, there’s huge instability and things are always changing as President Trump is obviously an unstable politician there. And equally, there’s volatility in the UK today. We don’t know what’s going on with our political situation and uncertainty brings volatility.”

“Let’s play upside, so let’s play upside down. The deputy governor of the Bank of England said there’s a lot of risk out there but asset prices are at all-time highs. We expect there will be an adjustment or decline at some point.”

He said the Bank of England’s comments ‘really reflect the uncertainty they see in the global economy at the moment’. He added: “I think we see that uncertainty as well, but we say the fundamental outlook is actually much more resilient than that.

“Volatility is part of the trend when you invest. Markets move in the short term on news flow and politics, but what really matters is where they go in the long term. If you look at US stock markets over the last 5 years, we’ve seen 180 new all-time highs, the most recent of which was actually last week. So despite the noise of all these horror stories, the reality is that markets have emerged, financial markets have delivered strong returns to investors.”

Is there a right and wrong time to buy?

According to Mr. Lewis, people should really consider investing: “I don’t think there’s ever a wrong time to invest. I think there are always reasons not to invest or to convince yourself not to invest. But I think it’s really about the long-term story, writing down the ups and downs and making sure you’re comfortable with that volatility as you go along.”

“Let’s imagine we have a crash tomorrow and markets around the world are down 50%. So, there would be major economic news and a major economic disaster. If you invested there 10 years ago, you still won’t be happy. But in most cases you’re still standing. And I think that’s the point, I’m not making any predictions. I’m just saying, so you need to think long term. The worst thing you can do is a beginner trader follow the ups and downs of the price every day, which will just make you feel bad and that’s the purpose of that.” It is not about investing money in the long term.