Investors should take long-term view on stocks and shares

As pressure mounts on UK households to meet soaring utilities bills or mortgage repayment rates, for the vast majority of Britons, it would be fair to say that looking to the long-term future financially is towards the bottom of their list of priorities.

Understandable though this is, just as it is important to take a long-term view and start squirreling money away in pensions funds or ISAs for many years down the line, so too can it be beneficial to take a long-term view on stocks and shares.

Of course, taking what is in essence a gamble on the world's stock markets hardly seems like a good idea right now, and even those already clued up on such investments are beginning to err on the side of caution, with recent research carried out by Lloyds TSB revealing that 53 per cent of investors are apprehensive about the condition of the economy over the next 12 months.

As such, more cautious investments, that is those offering greater security though in return for smaller potential returns, are growing in popularity, but, according to some experts, the global economy is essentially cyclical in nature and, therefore, while it may be experiencing a steady decline now, it is all but guaranteed that things will turn around.

Adrian Lowcock, senior investment advisor at Bestinvest, explained: "The stock market in the short term can be higher risk but in the long term there are opportunities to invest.

"This is just at the end of the stock market's short term downturn, it will pick up and recover. It is for the medium to longer term investor, the short term investor will run a higher risk of further falls before any recovery."

Despite this advice, for many Brits, the risk simply isn't worth it, no matter what financial sages may say, and many would prefer to stick to more traditional means of making their money grow.

And such a cautious approach can often prove to be lucrative.

For example, according to research carried out by Thomson-Reuters Lipper on behalf of the BBC, anyone with £1,000 to invest at the turn of the millennium would have been better off taking advantage of high street savings accounts rather than taking a punt on the UK stock markets.

For while stocks and shares would leave an investor with just £1,094 today, the more cautious approach would have generated a return of £1,358 – hardly an insignificant difference.

By all means, therefore, look into the potential of stocks and shares but those that do would be well advised to remember they will always constitute something of a gamble, while at least the minimal returns offered by traditional products are guaranteed.