Is now a “good” time to invest? Three key factors to consider

At the start of 2026, the FTSE 100 hit record highs as it surpassed 10,000 points for the first time since the index was created in 1984.

Whilst this will be welcome news for many investors, there are numerous reasons to expect volatility over the year ahead. In fact, according to research cited by MoneyAge, 92% of Financial Advisers believe the investment markets will be more volatile in 2026.

Whether you’re new to investing or considering expanding your portfolio, you might be asking: “Is now a good time to invest?”

Read on to explore three key factors to consider when creating an investment strategy in 2026.

1. The FTSE 100 could continue rising from its current record high

When share values are high, you might be tempted to wait for them to fall before investing, in order to buy more units for the same price and potentially see better growth when markets rebound.

However, no one knows for sure when the markets will decline, or how far they will fall. Whilst “buying the dip” is a strategy some investors swear by, consistency trumps clever timing.

Remember the investors’ adage: “Time in the market beats timing the market.”

Ultimately, it’s often worth investing as soon as you’re ready, rather than waiting for the “right time” to invest in the stock market. Historically, the markets have trended upwards over time, albeit with peaks and troughs along the way.

Whilst returns are never guaranteed, and past trends are not a predictor of future market performance, investments held for the long term have historically delivered positive returns.

As such, just because values are higher than ever, that isn’t to say they won’t climb higher still. In February 2023, the FTSE 100 reached 8,000 points: a record high, at the time. Just three years later, the index has gained over 2,000 points, giving potentially significant returns to those who invested when share prices were at an “all-time high” last time.

The longer your money is invested, the greater the chance your investments will have to grow. If you’re unsure about investing for the first time, or are an existing investor looking to expand your portfolio, a Financial Planner can help you define a strategy that suits your needs, risk appetite, and goals.

Find out how we can help you with investment planning.

2. Markets typically recover from downswings in the long run

There is currently much speculation over “upcoming drops in share prices” due to volatility in the global markets. If you listen to this media noise, you may be worried about the risk of investing amid such uncertainty.

However, there is no crystal ball that tells us what will happen to markets in the future. Plus, volatility in the stock market is normal. If you wait to invest at a time when there isn’t a risk of share prices falling, you could be waiting a very long time.

For instance, the FTSE 100 has historically recovered from even its most significant downswings. During the Covid-19 pandemic, the index fell by nearly 2,000 points between 31^st December 2019 and 31^st October 2020, as shown by London Stock Exchange data. However, it had recovered to pre-pandemic levels by 30^th April 2022.

So, if you’re planning to hold your investments for several years (which is usually the recommended strategy), short-term volatility might not prevent you from achieving long-term positive returns. A fall in share prices only becomes a real-terms loss if you sell whilst markets are down.

3. Your own circumstances may determine your investment strategy

Rather than looking at the market to decide whether or not to invest, it’s often worth considering your own financial readiness.

When you invest, there is no guarantee that you will get back the money you invested. Whilst long-term investments have generally seen positive returns in the past, it’s important to be aware that you could make a loss.

As such, when defining your investment strategy, you might consider:

• How much you have set aside in savings: Before investing large sums, it’s often worth setting aside enough money to cover your needs, ensuring you have enough for emergencies (usually three to six months’ income is the rule of thumb) and to repay any debts. In some cases, you might opt to invest small amounts regularly, whilst continuing to build your emergency fund and settle your debts.
• How long you plan to hold your investments: Should you need to sell sooner than expected, you may end up exiting the market during a downswing – locking in a loss. Therefore, it’s important to align your timing plan with your financial needs over the next few years, before investing large sums.
• How much risk you are willing to take on: Values can go up, as well as down. Whilst the markets generally trend upwards, some stocks may not recover from downswings. You might also consider diversifying your portfolio to mitigate any losses and selecting investments that suit your risk appetite.
• What your goals are for investing: You might be hoping to grow your wealth for retirement, leave a financial legacy when you pass away, or save for your child’s future. Whatever you hope to achieve through investing, your goals will help determine a suitable strategy for you.

Ultimately, the key is to ensure your investment strategy is affordable for your financial circumstances. If you’re unsure whether you’re ready to invest, a Financial Planner can conduct a holistic review of your finances to help define an investment strategy tailored to your needs and circumstances.

Get in touch

Whether you’re new to investing, looking to expand your portfolio, or are worried about your existing investments, email us at enquiries@pen-life.co.uk or call 01904 661140 to find out how we can support you.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.