The stock market has gyrated so much recently that even seasoned investment analysts are struggling to predict what happens next.
However, many of them agree that the volatility in global stock markets of the past six months is unlikely to go away anytime soon.
But is that a bad thing?
It may seem strange, but the recent economic and political tensions have actually made UK companies very cheap to invest in compared to their US and European rivals.
Essentially, for investors, it means they are able to snap up world-class companies at bargain prices.
However, jumpy markets tend to put off many would-be investors, who, afraid of losing money, put their cash into low-interest savings accounts instead.
This is illustrated perfectly by the fact that, in the 20 years since Isas were introduced, the stocks and shares versions have never been as popular as their cash equivalents – and the sharp recent moves in share prices are unlikely to help change that.
Don’t think short-term
The trouble with looking at the past few months in isolation is that it followed a 12-month period that was the most steady in living memory.
The average ‘standard deviation’, a good measure of volatility, for America’s top shares in the S&P500 in 2017 was less than half of “normal” figures for the previous 60 years. The sheer scale of the US stock market means that what happens there is repeated across the world.
It could be argued that the tensions that caused the stock market falls - a US-China trade war, the threat of a no-deal Brexit and a slow-down in Europe - have either eased or been factored into share prices already.
The FTSE All-Share Index, an important benchmark for investors, is not far off the level it was in September before the big wobble became a big slump.
And in the past 20 years, the All-Share Index has delivered average annual returns of 6.3% – a clear indication that markets have a habit of adapting to world events.
Savers with money in cash accounts, on the other hand, have suffered from a decade of painfully low interest rates.
The Bank of England indicated recently that it is unlikely to raise rates anytime soon, which is bad news for people with money in bank and building society accounts, or Cash Isas.
This isn’t a recent phenomenon. Our research shows a person who opted to utilise the full annual Isa allocation every year since 1999 in just Cash Isas would be £41,500 worse off than someone who ploughed money into a Stocks and Shares Isa.
Timing the market
Despite that compelling evidence, 41% of respondents in our study indicated they will move some savings into a cash deposit account over the next 12 months because of the economic outlook.
Of course, they may think about moving the money back into shares when markets calm down but the timing of that switch needs to be considered carefully.
Schroders calculated that getting in and out of the UK market at the wrong time over the past 30 years could cost £17,000 in lost investment returns on an initial sum of £1,000.
For those investors who stick with their strategies and stay in the market, there could be more highs and lows to come.
But while history is not an infallible guide to the future, Scottish Friendly’s research shows that those who hold their nerve and stay invested in stock markets will be rewarded with a better chance of generating the returns they started saving for in the first place.