Although the past few years have been characterised by cost of living rises and headlines about economic turmoil, the outlook for UK markets is very positive. In fact, recent reports reveal that the FTSE 100 showed strong performance throughout 2025 and recently reached a record high.
This is positive news if you have a portion of your wealth invested in UK markets and you may be tempted to change your strategy. For instance, you might consider cashing out a portion of your investments to unlock some of those returns. Alternatively, you may decide to move more of your wealth into UK stocks while they’re performing well.
However, changing your investment behaviours may not be the most sensible response to market movements, whether positive or negative.
Read on to learn what record highs for the FTSE 100 mean for long-term investors.
The FTSE 100 returned more than 21% last year and has had a strong start to 2026
There were several significant market upsets during 2025 as a result of tariffs introduced by the US government. Despite this, the FTSE 100 recovered well from short-term dips and displayed strong overall returns by the end of the year.
According to MoneyWeek, the FTSE 100 returned more than 21% in 2025 – its best year since 2009. The index started this year strongly too and, on 6 January 2026, reached an all-time high, breaking through the 10,000-point threshold.
There are various reasons for this strong growth in UK stocks. For example, certain defence companies such as Rolls-Royce, BAE Systems, and Babcock rose in value amidst the US invasion of Venezuela and rising geopolitical tensions.
Meanwhile, Whitbread – the owner of Premier Inns – saw positive growth as the effects of increased business rates were not as significant as originally feared.
Increased confidence in UK stocks and fears about volatility in the US may also have encouraged investors to move towards the FTSE 100.
As such, UK markets could continue to see positive growth throughout 2026, and you may wonder what this means for your investment strategy.
All-time highs are relatively common in stock markets
The FTSE reaching record highs may seem like a momentous event for investors. It’s easy to believe that this means UK markets present an opportunity you don’t want to miss. In reality, all-time highs are relatively common in stock markets.
Indeed, figures from the London Stock Exchange (LSE) show that by 9 January 2026, the FTSE 100 had already surpassed the record high reported only three days earlier. The index continued growing and by 15 January, it was at yet another all-time high, worth almost 100 points more than it had been on 6 January.
Since the time of writing, the index may have grown even further.
This demonstrates a common feature of stock markets, both in the UK and worldwide – they typically grow over time, despite short-term volatility, regularly reaching new record valuations.
Despite the media reports, these events are not particularly notable. Normally, a new record high indicates that markets have simply recovered from a period of volatility and continued an upward trajectory.
For example, figures from JP Morgan show that since 1950, roughly 7% of all trading days for the S&P 500 have been record breakers. More importantly, almost a third of those days became new “market floors”, meaning the index never fell below that level again.
These figures show that the recent performance of the FTSE 100 is unlikely to be an outlier.
It’s important to continue with your investment strategy despite headlines about record-breaking performance
When you see news about all-time stock market highs, it’s tempting to change your investment strategy.
You may want to cash out investments and secure the recent growth if you are fearful of an impending market crash. Alternatively, you might redirect your wealth and put more into UK markets, hoping to capitalise on this period of excellent performance.
However, in both situations, you risk harming your overall returns. Cashing out of the market prematurely could mean you miss out on future growth. Your portfolio may not be well diversified if you lean too heavily on UK stocks, potentially exposing you to more risk.
Fortunately, you may not need to make any changes to your investment strategy because, as we’ve seen, this record-breaking stock market is to be expected. We may see similar situations in the future if markets continue on an upward trajectory.
This means that if you hold your investments and maintain your current strategy, your portfolio could well continue growing, allowing you to build the wealth you need to achieve your goals.
Get in touch
If you are concerned about how market movements will affect your overall financial plan, we can advise you.
Please give us a call on 01276 855717 or email info@braywealth.com today.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested.
Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
Approved by the Openwork Partnership on 09/02/2026
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