1 in 10 to capitalise from credit crunch through the stock market

24 December 2008 / by Rebecca Sargent
One in 10 people are capitalising from the credit crunch by taking advantage of low interest rates and continuing to invest money in the stock market, research from Fool.co.uk has revealed.

According to the study, 11 per cent of people are still investing in shares, despite the fact that the FTSE 100 is 17 per cent lower than in 1997, however, this may not be a bad thing says Fool.co.uk.

The study found that even during two of the worst recessions in history, shares have continued to beat cash. In fact, during the Great Depression and World War II, the returns from regularly investing in shares were twice that of cash and between the oil crisis and the dotcom bust, shares were three times better than leaving cash in the bank.

Commenting, David Kuo, financial expert at Fool.co.uk, said: "It is only natural to react to recent events, and the credit crunch is bound to worry anyone who is thinking of investing in shares. Consequently, almost half of us prefer the comfort of holding cash instead.

"Trying to time the right moment to invest in shares is not easy. Those who try will get it wrong more often than not.

"Instead investing regularly helps to smooth out peaks and troughs in the stock market. Remember it's time in the market that's important, not timing the market," he advised.

The study also found that one in six people will continue to spend more, despite the current economic climate, while two in five will save more and one in three intend to reduce their debts.

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