You wouldn’t be alone in doing so. The first week of the new year is the busiest day for those seeking financial advice, with 2 January being the most popular day for enquiries to advisers, according to Unbiased.
Unlike putting your money in a savings account, beyond making the most of good rates, your returns from investing will be affected by when you put your money in.
Here, we take a look at whether investing earlier in the year is better for your money, and how you can save on your investments in 2025.
Please note: the content contained in this article is for information purposes only and does not constitute financial or investment advice.Is January a good time to invest?
The ‘January effect’ is the simple idea that stocks tend to perform well in January. Investment firm Schroders looked at 130 years of data and found January tends to perform well relative to other months.
The effect is noted especially on ‘small-cap stocks’, which are shares in smaller companies.
You can find small-cap stocks in broader indexes such as the FTSE All-Share.
The 'January effect' isn't a rule, however: you only need to look back to last year to find a January where the value of the FTSE All-Share Index fell.
Find out more:.Why have stock markets done well in January?
There’s no definitive answer as to why January tends to be a good time for investors, but there are a few theories.
One is that investors sell more loss-making shares in December to be able to offset those losses against any gains to lower their capital gains tax liabilities, and then they buy them back in January, which drives prices back up.
Others include the idea that investors have more money to invest in January and that people are generally starting the year with some enthusiasm.
People investing more in a certain month for other reasons like this can feed into the idea of a particular month being good for investments, causing more people to invest, which in turn boosts share prices. And the cycle continues…
Find out more:.Should you try to time your investments?
In theory, if you invest at the perfect time, when prices are low, you’ll stand to make a much bigger profit if the price of the stock rises. But, in practice, this is hard to achieve.
It’s much riskier to make the timing of your investments a key part of your strategy, and you could lose out more by trying and getting it wrong than by ignoring it completely.
An alternative to picking the right or the wrong time to invest is to invest gradually over a longer period of time. Doing this, you can benefit from something called pound-cost averaging, which means by investing regularly you even out the high and low prices you buy at.
You might not be able to match the returns of investing at the exact right moment with regular investing, but you could miss the big losses of getting that timing wrong.
Find out more:.Can regular investing save you money?
Most investment platforms offer regular investment services, and some offer you lower transaction fees and sometimes lower account fees if you set up a regular monthly payment.
This can take some of the admin out of the investing process and make use of pound-cost averaging.
Many regular investment services have a lower minimum amount compared to what you need to make a lump sum, which can require as much as £1,000.
There can be limitations on what investments you can access while regular investing, for example they might need to be traded in GBP.
The investment platforms where regular investing saves you money
Find out more:.Tax-proof your investments while you can
You may not need to rush to invest as there's still a compelling reason to move money in the next few months – your Isa allowance.
The tax year ends on 5 April 2025 and any unused allowance you have won't rollover.
Find out more: .How to get the most out of your investments in 2025
Make sure you have an emergency fund before you get started Invest in line with your goalsWatch out for feessource https://www.which.co.uk/news/article/is-the-new-year-the-best-time-to-invest-anYa57b0xwO2