Investing during a cost-of-living crisis

Written by Jeannie Boyle on 19th Oct 2023

The thought of investing your cash only to see the value of your account drop is enough to make anyone feel nervous. But even in the current cost-of-living crisis, keep in mind that the economy is cyclical, and history tells us that financial markets, when they fall, will likely bounce back. 

Before you start investing, it’s wise to have enough money in an instant-access savings account to cover three to six months of expenses. This means that if something unexpected happens and you need to access your money quickly, you’ll have some readily available. 

The golden rule is to think of investment as a long-term strategy and keep contributing to your pension and/or ISA when you can. If you can invest for at least five years, you’ll be able to ride out most of the peaks and troughs in markets and have a better chance of seeing a good return. 

Invest to match your values

At EQ Investors (EQ), we offer a wide range of sustainable investment options across the green investment universe which can be tailored to suit your goals. 

With a ten-year track record, the EQ Positive Impact Portfolios are mapped against the UN Sustainable Development Goals and designed to address the biggest challenges faced by humanity. 

Our EQ Future Leaders Portfolios combine the growing preference for socially responsible portfolios with the increasing popularity of low-cost passive funds. The core of the portfolios invests in businesses that are strong performers when measured on environmental, social and governance (ESG) criteria. They also invest in sustainable sectors, such as clean energy, healthcare, and green bonds. 

Launched in early 2022, the EQ Climate Action Portfolios allow you to align your financial goals with the global effort to reduce climate change risks and reach net zero. They invest in companies on a credible, science-based path to net-zero; companies ahead of the curb in carbon efficiency and those whose products and services provide solutions to decarbonisation. 

Climate change

Going forward, investment portfolios will need to continuously decarbonise to tackle global climate change. Low emissions portfolios are better prepared for climate change transition risk, so we measure the carbon footprint for all our portfolios. 

But no investment is included based on its environmental or social credentials alone – it must also aim to deliver an attractive return for investors. Demand is being driven by this combination and an increasing number of people who prefer to invest in alignment with personal values. 

A number of studies, including from heavy-hitting financial institutions such as Morgan Stanley, have shown that green investment can boost returns while reducing risk. This makes sense when you consider this approach favours companies that are actively trying to do good and run their businesses in a sustainable way. 

Such companies avoid fines and other penalties and have stronger relationships with their customers, suppliers, and employees. Moreover, they tend to operate in new sectors with high-growth potential. In short, these are the green companies of the future, and those we want to be invested in. 

Suitable for ISAs and personal pensions, we’ll provide all the investment advice you need, so you can just sit back and check your performance online, anytime.

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