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How To Overcome Investment Fear

  • April 28, 2021

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Are you looking to increase your wealth in time for your retirement? If so, you might want to invest your money. From investing in stocks and shares to building a property portfolio, these investment ideas are certainly worth considering. 

But here's the thing about any kind of investment. There are risks involved. Yes, you can make money, but you can also lose money too. And it's because of this risk that many people get fearful and decide not to invest at all. For all we know, this could be something that relates to you.

However, there are ways to reduce investment fear, as we discuss below. 

#1: Educate yourself

Knowledge is everything when it comes to investing. While there is still an element of risk involved, you will have the ability to make more informed choices if you can educate yourself on the type of investing you are considering. Learn the basics with one of these investing books for beginners, and look online for the relevant YouTube videos, podcasts, articles, and TED talks too. The more you learn, the safer you will feel when you do decide to invest your money.

#2: Find ways to reduce risk

By playing it safe with your finances, you can minimize the risks involved. You could put money aside each month for your investments, for example, as this way, you wouldn't have to touch the money that is used for your household essentials and utility bills. As has been written about endlessly online, you could also diversify your portfolio. Rather than putting all of your eggs in one basket, you could invest in more than one area, perhaps spreading your money between stocks, commodities, and exchange-traded funds (ETFs). These are just two of the ways to reduce your investment risk, but you can find other ideas online. The next point on the list might also be useful.

#3: Learn investment strategies

The strategies you use will depend on the type of investments you intend to make, so look online for popular techniques. Consider, for example, Barr Rosenberg. He is very famous in financial circles, for many reasons, not least because he came up with the idea of quantitative investing, which is a data-driven technique to control risk and improve returns. Learn more about this by following the link but look for other techniques too. You need to find one that you are comfortable with, so learn several different investment strategies before sticking with one that works for you.

#4: Find a mentor

Investment strategies are all well and good, of course, but if you're a beginner investor, you might still be a little risk-averse. For this reason, find an investment mentor. It could be somebody you know already, or it could be somebody whose services you can find online. There is some advice here on finding real estate investing mentors, for example. You can learn a lot from the experienced advice of another, and you will have the opportunity to get the answers to any pressing questions you might have. You should have more confidence about investing after talking with them, so to allay your fears, look for the people who can help you.

There is nothing unnatural about being fearful. It's an instinct that kicks in whenever we sense danger. So, we perfectly understand your fear of investing. However, it is possible to minimize investment risk, so don't give up on the idea entirely. Consider our suggestions and then start small with the investment of your choosing. By taking a few tentative steps in the right direction, you will start to build your confidence and, eventually, overcome the fears you had at the beginning.