With all the  noise in markets over the past few weeks, investors could be forgiven for  thinking twice about topping up their ISA. Volatility, tariffs, inflation  chatter – it’s been a busy time for headline writers and a natural moment to  pause before committing capital. 

But what does  history teach us about ISA investing and how different approaches have worked  out for investors? This week’s chart explores this very question – and the  results might surprise you. 

Our chart  compares three different approaches to allocating to an ISA over the last 10  full financial years (returns from 06/04/2014 to 05/04/2024), using the  performance of the MSCI World Gross Return (GBP) index. Each investor  contributes the same total amount – £20,000 per year – but the timings  differ: 

End-of-Year  Investors

‍‘Last-Minute Larrys’ invest £20,000 at the end of each tax year  (5th April). 

Monthly  Investors

‍They invest just over £1,666 on the 6th of every month – a steady, consistent  approach. 

Start-of-Year  Investors

‍‘Early Birds’ invest £20,000 at the start of each tax year (6th April). 

Even though they each invested the same amount, the outcomes varied significantly. The Early Birds came out comfortably ahead – their money spent more time in the market, compounding for longer. Monthly investors benefited from pound-cost averaging. But the ‘Last-Minute Larrys’ lagged behind. This was not due to poor investment choices, but because they simply gave their money less time to grow.

This highlights a key principle: even small timing differences in how you allocate to your ISA can add up over time. The evidence shows ‘time in the market’ is a more effective approach to investing than ‘timing the market’. Partnering with a trusted investment manager means you and your clients can leave decisions about how to react to changing market conditions in the hands of our highly experienced team.

Key takeaway: In investing, time is one asset you can’t accumulate. Once it’s gone, it’s gone. The earlier you invest, the more time you give yourself, and the more likely you are to achieve your financial goals – enabling you to focus on what really matters in life.

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This article is provided for general information purposes only and should not be construed as personal financial advice to invest in any fund or product. These are the investment manager’s views at the time of writing and should not be construed as investment advice. The opinions expressed are correct at time of writing and may be subject to change. Capital is at risk. The value and income from investments can go down as well as up and are not guaranteed. An investor may get back significantly less than they invest. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds.