Investing tips: how to conquer psychological investment hurdles
How to get past some of the worst hurdles when it comes to investing: the ones in your own mind.
It can happen to the best of people. They hear about a good investment, or just have the itch to play the market a little, but at the last moment they find themselves stopping, frozen with fear and worry, and letting that once-in-a-lifetime investment pass them by. Sometimes the greatest problems with investment have nothing to do with the investments themselves; they’re all in the potential investor’s mind.
There’s nothing wrong with being pensive about an investment, or worrying about putting money into a fund or stock where there’s a possibility that you might loose it. That’s why they call it “playing” the stock market… there’s always a possibility that you might not win. For some people, however, there is a great conflict that arises with this possibility; though they want to invest in whatever the investment is that’s been presented to them (or they want to invest, period), there’s always something that holds them back. Often these people will feel worse about themselves, thinking that they’re too scared to take a chance. If you’re one of these people, then don’t worry… there is help.
The first thing that you should do when faced with this sort of fear is to realize that there are a lot of people who are afraid of these sorts of investments, and there are a lot of people who never invest in anything more risky than a savings account. You’re not alone, and you don’t have anything to be ashamed of. The fact that you’re interested in investment at all indicates that you at least want a chance at something riskier with the potential for gain; you just have to find the right avenue to explore it.
Perhaps you’re afraid of losing money. Maybe it bothers you that you’re going to invest such a large sum at once (even if it’s relatively small in the world of investment, it might be big to you). Or you might just not feel right about not having control over your money. All of these are perfectly valid fears, and things that you should consider before investing. Talk to an analyst or broker, or even someone at your bank. Do some research. If you’re going to invest in stocks or bonds, know the history of the company or fund before you invest.
If you’re still worried, perhaps you should start with a “safety stock” such as Johnson & Johnson or some other well-established name. The potential for high returns is much lower, but the chance of the stock dropping considerably is also lower. Many such stocks exist, common brands and names that have been on the exchange for years; many big time investors have a section of their portfolio dedicated to stocks such as these, specifically for the security and stability that they offer.
If all else fails, use an online brokerage such as e-Trade or ShareBuilder. You can use the “jumping in” approach, researching stocks and getting together an order, and then holding your breath as you click the “Purchase” button. After all, there’s usually a little time that you can use to cancel an order if you really need to, plus the ease of making the order might help to reduce fears about others criticizing your trades.
In the end, just take things a step at a time and make sure to make well-educated investments. It’s not as bad as it might seem, and it can pay off in the end (if you let it.)