Whether it’s US tariffs, increased European government spending on defence, talk of a ceasefire between Russia and Ukraine or continued unease around the future of inflation, and in turn interest rates, it’s all causing uncertainty.
The level of unknowns feels unusually high. Perhaps it’s made worse because there could be a new announcement via social media at any time of the day which has the potential to shock markets.
Investing during times like this feels uncomfortable. And it is uncomfortable, with the fear of missing out (FOMO) on good returns having a big impact on some investors’ decisions.
For others, it’s the worry about potential market losses and whether they should hold more cash.
Investment markets are always worried about something. But the markets, and investors, also have an ability to see through the uncertainty and look to future prosperity.
You only need to look back to 2020 and the onset of the pandemic.
Markets got very spooked at the huge number of unknowns. But they soon moved on from that fear, to when vaccines could become available and how quickly the world would get back to normal.
This article isn’t personal advice. Remember, investments and any income from them can rise and fall in value, so you could get back less than you invest. Yields are variable and not a reliable indicator of future income. If you’re not sure if an investment’s right for you, ask for financial advice.
What does all this stock market volatility mean for investors?
The levels of market movements seen recently can be scary, even for experienced investors, but it’s important to remember that investing is a long-term pursuit.
These (very) short-term sell offs or spikes should be less scary in that context. The value of compounding is huge and shouldn’t be underestimated, so don’t be put off by short-term noise.
If you’ve already used your ISA allowance for the year, it’s likely that the best thing you can do is just leave your investments alone during any shocks, provided they still fit with your objectives. Timing moves between markets and cash is easier to get wrong than right.
If you haven’t used this tax year’s ISA allowance, you could take advantage of your ISA allowance before you lose it after 5 April and invest it later on.
If you’re worried about investing it all at once, you could drip feed it into the stock market every month. Through a monthly direct debit, you could start contributing to your allowances this tax year or next.
Investing monthly means you benefit from a phenomenon called ‘pound cost averaging’ – this helps reduce the impact of market ups and downs and average the cost price you pay for an investment over time.
Another thing to think about is how you invest.
Individual shares or bonds are generally more volatile than funds. To take just one example, over the 12 months to 1 April 2025, Tesla shares have traded at a low of $138.82 and a high of $488.50. They are at around $250 at the time of writing.
That’s some journey and is a classic example of the perils of investing in a single company, rather than a diversified fund – whether it’s actively managed or a passive (or tracker) fund.
If you want to leave it to the experts, here are three funds that could help.
Investing in these funds isn’t right for everyone. Investors should only invest if the fund’s objectives are aligned with their own, and there’s a specific need for the type of investment being made. Investors should understand the specific risks of a fund before they invest, and make sure any new investment forms part of a diversified portfolio.
For more details on each fund and its risks, use the links to their factsheets and key investor information.
You can invest without having to worry about UK income and capital gains tax with our most popular account, the HL Stocks and Shares ISA.
Open or top up an ISA from as little as £25 a month or a £100 lump sum.
Before you apply, make sure you’re happy with our terms and conditions (including Tariff of Charges) and key features. Then all you need is your debit card and National Insurance number to hand.
Plus, if you act before 5 April you could benefit from one of our special offers for new and existing HL clients. Terms apply.
3 ISA fund ideas to navigate stock market uncertainty
A broad stock market option
For global stock market exposure, you could consider the Legal & General Future World ESG Tilted and Optimised Developed Index fund.
It provides a low cost and straight forward passive investment option which invests in around 1,300 companies across the globe.
It takes into account environmental, social and governance (ESG) factors like the level of carbon emissions generated and board diversity. If companies score poorly on these measures the fund reduces exposure.
There’s a bias towards sectors like technology, pharmaceuticals and financials and from a regional perspective, the fund invests most in the US stock market.
The fund can invest in some smaller companies, which adds risk.
A more adventurous option
FSSA Asia Focus is a more adventurous option, focusing on investing in both developed and emerging markets in Asia.
The fund is run by a manager and team with a great pedigree of investing in Asia and the managers view themselves as stewards of investors' capital, looking after it as though it's their own.
Fund manager Martin Lau has an impressive track record of picking some of the region's best-performing companies over the long run.
Remember, investments in emerging markets add risk.
A more conservative option
For a more conservative option, you could consider Troy Trojan.
The fund aims to grow investors' money steadily over the long run, while limiting losses when markets fall. It invests in a mix of investments across shares, bonds and gold. It also includes some of the world's best-known companies with highly recognisable brands.
The fund has the flexibility to invest in higher-risk smaller companies and while the fund contains a diverse range of investments, it is concentrated, which is a higher-risk approach.
Annual percentage growth
Feb 2020 to Feb 2021 | Feb 2021 to Feb 2022 | Feb 2022 to Feb 2023 | Feb 2023 to Feb 2024 | Feb 2024 to Feb 2025 | |
|---|---|---|---|---|---|
L&G Future World ESG Tilted and Optimised Developed Index | 23.85%* | 13.26% | 2.10% | 21.46% | 14.36% |
IA Global | 22.85% | 7.24% | 1.62% | 12.41% | 9.61% |
FSSA Asia Focus | 23.74% | -1.16% | 0.40% | -8.27% | 11.92% |
IA Asia Pacific ex Japan | 31.65% | -6.44% | -1.66% | -11.79% | 10.25% |
Troy Trojan | 5.37% | 12.80% | -2.37% | 3.25% | 9.26% |
UK Retail Prices Index (RPI) | 1.37% | 8.18% | 13.84% | 4.53% | 3.41% |
*The period between 29 February 2020 and 28 February 2021 reflects the performance of the I Class version of the fund. Performance from 28 February 2021 onwards reflects the performance of the C class version of the fund. This is due to when each share class was launched.