Important information - the value of investments and the income from them can go down as well as up, so you may get back less than you invest.
Recent events have led to sharper-than-usual market movements, often referred to as market volatility. While periods like these can feel unsettling, they’re also a reminder that this is how markets work - they respond to what’s happening in the world around us.
As the chart below shows, even after periods of recession and market stress, the long-term direction of US equities has been upwards. It demonstrates how $100 invested in the S&P 500 in 1990 - and left untouched - would have grown over time, despite setbacks along the way.
That said, when volatility strikes, we tend to react more emotionally to the possibility of losses than we do to gains. So, it’s only natural to pause and ask, “Should I wait to invest?”
Especially when the action you take at times like this - or don’t take - can shape outcomes both now and further down the line.
Making quick decisions based on short-term movements can be costly. And this is perhaps magnified as we approach the end of the tax year. Because while markets rise and fall, your ISA allowance works to a fixed timetable. Once the tax year ends, any unused ISA allowance cannot be carried forward.
Secure your ISA allowance first. Invest it later
If uncertainty is making you hesitant, there’s a practical middle ground.
You can contribute to your ISA now - securing this year’s allowance - and hold the money as cash within the ISA while you decide how and when to invest it.
This allows you to protect this year’s tax-efficient space without the pressure of making an immediate investment decision. It gives you time to think. And, if you prefer, you can phase money into the market gradually.
The important step is getting the money inside your Stocks and Shares ISA. Once it’s there, you remain in control of how and when it’s invested.
The benefits of regular investing
If sharper market movements are what’s holding you back, regular investing can help steady the journey.
By investing monthly, you spread payments across different market levels - buying more when prices are lower and fewer when prices are higher. Over time, this can help smooth the impact of short-term volatility.
It also turns investing into a habit rather than a reaction - which can help take some of the emotion out of investing.
Time in the market matters more than timing
Markets will always experience periods of uncertainty. But long-term investing has historically rewarded patience and discipline.
Trying to wait for the ‘right moment’ can mean missing opportunities - and potentially missing using what’s left of your ISA allowance altogether. Time in the market has often proved more powerful than trying to time the market. And time inside an ISA, sheltered from tax, can be even more powerful.
5 key questions to ask yourself
You know what they say about acting in haste and repenting at leisure? So before making any rash decisions, ask yourself the following and weigh up what this means to you.
1. Have I used my full ISA allowance this tax year?
2. Could I secure the allowance now and invest gradually?
3. Would setting up a regular savings plan help smooth volatility?
4. Am I reacting to headlines - or following a long-term plan?
5. Can I use any other valuable tax allowances before they reset?
Ultimately, what it comes down to is this - markets move. That’s the nature of investing. But your tax allowances are certain. They reset every year. And when it comes to your ISA allowance - once it’s gone, it’s gone.
Short-term market movement shouldn’t stop you from making the most of long-term tax advantages upfront. If you were already planning to use some, or all, of your 2025/6 ISA allowance, don’t let volatility distract you from that tax-efficient goal. Secure the allowance. Then let time - and discipline - do the rest.
Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. This information is not a personal recommendation for any particular investment. Eligibility to invest in an ISA and tax treatment depends on personal circumstances and all tax rules may change in the future. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.
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