Do not let fear hinder you. If you have avoided investing because of an underlying fear factor, these simple tips should help you.
There is always an element of fear in every aspect of our lives. Regardless of how simple your life is and how minimal the risks you take are, there is always a possibility that something bad could go wrong.
This same applies to investing. With investing, the greatest fear any individual has is the fear of losing money – and we all know there are so many ways to indeed lose money. However, also like other aspects of our lives, if we allow fear hinder us we would really not do anything. Ultimately, we would remain static.
If you have avoided investing because of an underlying fear factor, the following tips should help you:
Know your stuff
Ever heard the line “people fear what they do not understand?” This is because there is no way to rationalize a thing when you have no idea what it is about. Rocket science only sounds like ‘rocket science’ because you don’t know how it works.
However, the scientists who are learned in the field know it as easily as we know what we do in our jobs. For you to combat the fear of investing, you need to learn about investing. Read about stocks, bonds, and all the possible kinds of securities to invest in.
Avoid surprises; learn about the risks, the expenses, and ensure that you are consistently informed as an investor. You would ultimately realize that it isn’t as complicated as you thought.
Know exactly what you want
If you planned to travel to a certain place and you know exactly what you plan to achieve there as well as the need for you to go there, will you be so scared of the risk of the weather being unfavorable or the possibility of being faced with traffic that you don’t go? Most probably not.
You would be wary of the possible challenges you might encounter, but you would be so fixed on the goal that you will go for it. When you think of your investments, where do you see yourself a few years down the line? Have a clear objective and focus on the bigger picture. You might indeed encounter traffic or obstacles along the way, but you would get there.
Have a clear strategy
When you have a map with you, getting to any destination would not seem so hard even if you have never been there before. This is the same purpose an investment strategy serves for you. Craft a clear investment strategy based on your preferences and goals.
If you had an investment strategy that somehow wasn’t working right, it is fine to switch strategies along the way. Mistakes are normal. However, be sure that your revised strategy pulls you closer to your objectives.
Seek Help
Having an advisor who is interested in your growth and success as an investor is as helpful as having a good mentor on your success journey. However, where you cannot find a good advisor or if it would cost you too much, there are myriads of financial platforms you can consult.
For example, Yochaa’s analyst-led practice on the ‘Trade’ platform, would show you a hypothetical/ simulated investment pattern that you can follow. With the right guidance, you would get the hang of it soon enough.
Don’t rush into it
If you haven’t invested at all, there is no point jumping into it haphazardly. If you had not invested at all, a good method to use it to allocate percentages to it. For example, if you currently spend 100% of your income on yourself, you can set a timeline to invest a certain percentage.
You could plan to invest 10% of your income over the next 6 months. This is so you can invest money you can do without at least at the beginning. When you get better as an investor, you can increase the stakes. The goal is to start small and remain consistent with it. Take time to learn through your mistakes and soon, all your fears would dissipate.
Understand that losses are normal
Losses are not just normal, they are also prerequisites to getting tougher and better as an investor. The biggest investors in the world have also been the biggest losers over the course of their journey.
Don’t let losses bother you so much – especially in the short term. If you are focused on the long term, the losses would not matter after a while.
Investing can be tough especially when you have no experience, but just as babies wobble through their first steps with a little fear and ultimately get the hand of it to the point of running, it is only a matter of time before investing becomes a simple affair. You just need to get over your fears and take the first leap. It would be worth it.
Written by Lawretta Egba.
