All about stocks and shares

Is the stock market suitable for me? Why invest in stocks & shares?

While past performance is not a reliable indicator of future results, over the long-term the stock market has performed better than some other types of investment such as cash and bonds. But, as we all know from events of the past 18 months or so, the stock market goes through good and bad times along the way, and you may not get back what you put in.

If you have money you can afford to put away for 5 years or more, then it makes sense to take advantage of the potential offered by the stock market to grow your savings, balancing this with a level of risk you are comfortable with.

When will the stock market recover?

No one knows exactly when this will happen. Stock markets are driven by what investors think will happen in the future. When markets have had dramatic falls in the past, they can start to rebound even when news is still bad if investors foresee better times ahead.

This makes market recoveries hard to predict. So we encourage our customers to make sure they do not miss out by keeping investments in the stock market when it's appropriate for them, and not to worry too much about trying to pick the perfect time to make an investment.

What is The Co-operative's view of markets?

Over the next 12 months, the view of our fund management team is:

• Stock markets around the world are likely to remain volatile.
• We expect interest rates to remain low with inflation expected to be around 2%.  With interest rates expected to be at low levels, the return on cash savings will be less attractive than in recent years. 
• We will continue to take a cautious approach on behalf of our customers, for example, by favouring companies that are less vulnerable to economic downturn.

Over the long-term, 5 years or more, the view of our fund management team is:

• Stock market investments are likely to perform better than cash.
• There remains good opportunities to invest in companies that have a solid management team, apply a sound business strategy and overall, show good prospects for long-term growth.