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Investing fears and how to overcome them

Fear #1: I could lose money 

There is no assurance that you won’t experience a loss at some point because markets fluctuate up and down constantly. Even the most successful investors in the world have suffered losses, but consider these factors to help put that into perspective:

  • You’re already enduring the effects of inflation: If inflation surpasses the interest rate, money in a savings account loses real value (what you can actually do with it).
  • To invest, rather than speculate: Developing a disciplined investing approach and employing tried-and-true methods can lower the likelihood of losing money. Nevertheless, past performance is not a guarantee towards future results.
  • Choose your investments well: Gaining knowledge of how investments in various asset classes and markets operate, is essential to achieving your financial goals, because different products come with distinct risks.
  • Diversification reduces risk: Diversifying your investments over a variety of assets, regions and industries, is one of the best methods to help lessen your risk of losing money.
  • Time horizon may affect risk tolerance: The value of your investments may decline, however if you can afford to hold them for a longer term, you may have the potential to allow them to recover, as time can be a great healer.

Fear #2: I don’t have enough money to invest  

Undoubtedly, you must pay your usual bills first. However, even a tiny sum, like $100 a month, may be sufficient to get started with investing.

Before you start, think about:

  • Your current financial situation: Budgeting is a fantastic technique to analyse your income and expenses to determine how much money you have each month to invest.
  • Putting money away for a rainy day or emergencies: it should equal three to six months’ worth of living expenses.
  • Becoming debt-free: It’s definitely helpful to pay off any short-term debts, such as credit cards or loans with a high interest rate, before investing.

Fear #3: I don’t know who to trust with my money

There is a lot of information available, as well as a wide variety of investment options and sources of advice, which might be confusing if you are new to investing.

One way to get more peace of mind is to seek professional advice from a reputable company. Also, ask for recommendations from friends and family or do some research online - the internet makes it easier than ever to do your research on a company offering advice.

If you decide against seeking assistance, there is a large array of resources and information available to regular investors that can aid in developing your own investment strategy.

Fear #4: I don’t know how to get started

When you first start out, you might think you don't have the time or knowledge to fully analyse your options.

But you're already on the right track by making this initial move and learning more about investing! So, don't be intimidated; we're here to assist you in achieving your financial objectives.

Key takeaway

It’s natural to have some fears about investing. But by learning how it works, understanding the risks and finding ways to mitigate them, investing can give you the chance to make your money grow.

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Find out more about the pros and cons of investing in shares and funds