Global uncertainty is already a defining feature of 2022, and this is reflected in households’ confidence in their finances.

Just one in 10 (10%) people believe the economy will improve over the next 12 months, while nearly three-quarters (74%) expect things to take a turn for the worse, according to recent research from Which? (which.co.uk).

Many of those with investments will have seen the impacts on their savings pots in recent months.

It might be tempting to withdraw some cash, but it’s also important to remember investments are generally intended as a longer-term way to build up money, and there will be peaks and troughs in the markets over time.

Of course, everyone’s situation is different, and some people may want to take independent financial advice when weighing up what is right for them.

Maike Currie, investment director at Fidelity International (fidelity.co.uk), says: “It can be difficult to look to the longer-term right now, but this is how you need to think about any investments you have.

“It may sound counterintuitive, but staying invested through volatile times can often be the best approach. Trying to time the market leaves you at the risk of missing any market corrections, while also posing the impossible question of when is best to buy back in.”

Scammers may also use the opportunity to strike, with Lloyds Bank recently saying a quarter of investment scam victims are 18 to 24 years old.

Victims are lured by fake ads on social media promoting cryptocurrencies and meme stocks – shares in a company that have surged in popularity due to going viral, rather than because of their financial performance.

Currie says: “When markets are volatile there is often an increase in investment scams, as unscrupulous people try to take advantage of the situation.

“An investment scam is a fake – but extremely appealing and highly convincing – investment opportunity. Fraudsters will impersonate real people from genuine financial services firms over the phone, email, online and post.

“Be wary of scams right now – if something looks too good to be true, it often is.”

Currie also says there is an important distinction between the risk someone may be taking on and volatility. “Volatility reflects the movement of a price – whether it falls or increases quickly, and by how much,” she explains.

“Risk, however, is the measure of how likely your investment will deliver a permanent or long-lasting loss of real value. Right now, your investments, regardless of the risk profile, are likely to experience some shifts in value due to uncertainty in the market.”

Another pitfall could be keeping too much money concentrated in one type of investment. Currie says: “Different assets are likely to perform differently when the market is up and down. Diversification is an important part of any investment strategy at any time, but even more so now.

“Make sure you have a mix of assets, from shares and funds to bonds and cash, across different sectors and geographies. This will keep your portfolio ‘volatility proofed’ and balanced.”

Drip-feeding money into investments regularly over time could potentially help smooth out the impacts of market volatility.

“Now is the time to take a slow and steady approach to your investments,” advises Currie.

“You can mitigate some uncertainty by remaining committed to investing a set amount on a regular basis across a spread of your investments.”