Take a long term view

The stockmarket is not always an easy place to be - it can offer long term rewards if you are a patient investor, but if you decide to move out of your investments at the wrong time, you could lose a big chunk of your capital. It is important to understand this and remember your reasons for investing in the first place. Take a long term view - typically ten years or more and stay focused on your goal.

The benefits of staying invested

Take a look at the Market Chronicle, which illustrates how the markets have reacted to major social, political and economic events over the past 75 years.

Fidelity's research shows that the longer you stay invested, the greater the chance that you'll make money. Our analysts looked at different outcomes for investors in funds held for one, five and ten years, over a twenty year period. The results show that over that period, any UK or global portfolio held for ten years would have made money.

Time, not timing, is the key

One of the key aspects to investing over time is resisting the temptation to change your portfolio in response to short term market movement. "Timing" the markets seldom works in practice - and can make it too easy to miss out on the gains.

To test this, our analysts looked at returns from the UK and international markets between 1991 and 2006. They found that missing out on just a few of the market's best days can have a significant effect on the performance of investments.

	Read more about our research and taking a long term view *

Phasing - make volatility work for you

Phasing your investment is where a lump sum is "drip fed" into the market at regular intervals. This means that when prices are high you buy fewer shares in your investment and when prices are low, you buy more. Whilst this will not guarantee you a profit or protect you against losses, it can help to smooth out the effect of market changes on the value of your investment.

One benefit of staggering your investment can be that, as you will be making a series of investments, you don’t have to worry so much about putting all your money into shares just prior to when prices may fall. If the market does fall, then you know that your next monthly investment will benefit from the higher number of shares you will be purchasing at the lower price. Of course, in a rising market, this will result in less shares being purchased but then your existing shares should be showing a profit.

How phasing works

your lump sum investment is held within your stocks and shares ISA account and gradually invested into the funds of your choice in six equal monthly instalments
interest will be paid on cash awaiting investment into your fund choices (interest earned will be subject to a flat Inland Revenue charge of 20%, which cannot be reclaimed)
even if some of your investment is not phased into your fund choices until the following tax year, the investment will still be deemed to have taken place in the tax year it was originally received. You will therefore still have your full ISA allowance available to you for the following tax year
following your original investment, should you subsequently decide that you wish to have all your money still held in cash invested immediately, you can do so by simply instructing us to do this
simply tick the phasing box when you open your ISA online