New research from ETP provider GraniteShares shows the UK’s cost of living crisis is putting the squeeze on share trading with investors cutting back or stopping to save cash.
Around one in three (30 per cent) of regular investors who have bought shares in the past year say they have been affected by the pressure on incomes from soaring inflation and rising energy bills.
The nationwide study found 24 per cent have cut back on how much they invest because they cannot afford to lose money while 6 per cent say they have stopped completely because they were losing money which they could not afford.
However nearly two-thirds say they are not worried by the cost of living squeeze in relation to their share trading while 7 per cent say they are trading more as the money they make helps boost their income to keep up with inflation.
The research for GraniteShares, which offers UK sophisticated investors a suite of index ETPs tracking FAANG stocks and a suite of Short and Leveraged Single Stock Daily ETPs tracking some of the most popular companies in UK markets, found stock market volatility has had more impact on regular traders.
Around one in eight (12 per cent) says they have stopped trading since the Ukraine crisis increased market volatility while 29 per cent admit to losing money but are still trading. A lucky – or skilful – 11 per cent claim to have profited from volatility and have increased the amount they invest.
Will Rhind, Founder and CEO at GraniteShares says: “Share trading is risky, so it is understandable that regular investors are becoming more cautious about the amount they invest.
“The majority however are sticking to their investment strategies despite the cost of living squeeze and heightened volatility.
“It remains the case that there is a growing number of sophisticated investors in the UK who see opportunities from volatility and that is reflected in the demand for products such as short and long ETPs which provide the flexibility needed to help navigate volatile market swings on both the long and short sides.”