What is the primary thing that prevents many people from investing and earning excellent returns as a result? In many cases that factor is fear. This fear can be particularly prevalent among Millennials, who saw, as children or teens, the impact of the Great Recession. According to a report from UBS Wealth Management, Millennials hold more than half their assets in cash and only about one-third of their assets in equities.
Unfortunately, a fear of investing can prevent people of any age from putting their idle money to work and seeing returns as a result.
How can you move past your fear and jump into investment opportunities, whether that’s the traditional stock market, trading penny stocks, or looking at alternative methods, such as peer-to-peer lending?
View Investing as Not Optional
Too many people see investing, in any form, as something that’s optional, or even something exclusively reserved for the wealthy. That’s simply not the case. If you want to be able to grow your money successfully, plan for the future and avoid the consequences of inflation, you have to start viewing investment as a necessity. There is no way to simply hoard cash and expect good results from it. That cash is going to lose value quickly, leaving you with no advantages regarding your money management strategy.
Educate Yourself
As with almost everything, the more you can learn and educate yourself on the topics surrounding investing, the less anxiety you’re likely to feel. Start by learning the fundamentals, and then once you feel comfortable with the basics, become a follower of the stock market and financial news. When you arm yourself with information, you’re more likely to not only feel more confident in your decision making but more willing to try new things in terms of how you invest your money.
Use Technology
A big part of starting to feel more comfortable with investing relies on convenience. In today’s environment, investing, like many other things, is driven by technology. Look for low-cost platforms that let you invest easily and quickly, and also maintain a strong sense of control and visibility into what’s happening with your investments.
Diversify
Learning to diversify your investments is important, whether you’re just starting out, or you’re a seasoned financial pro. When you diversify, it’s not only good for your portfolio and long-term outlook, but it’s also a great way to ease your own worries because you don’t depend on any one stock or investment approach. You’re not as likely to “lose it all” when you spread your money across a range of opportunities.
Stop Checking Your Investments
Finally, when you’re learning to be an investor and conquering your existing fears you ultimately have to take a long-term approach. That approach is what can help you weather even the big downturns that can impact your investment. As part of a long-term strategy, try to avoid checking your progress every day. The most successful investors are often the people who invest, then don’t even think about it again for an extended period of time. This will help you avoid even seeing the ups and downs that are a natural part of most investments.
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