These negative experiences could inadvertently have influenced their investment decisions today and may have hindered their retirement prospects. They are less confident in stock investing because of their distrust of the market and lack of investment knowledge.
They may decide to keep a large portion of their portfolio in cash, despite the low interest rates. This is because they believe that cash’s safety and security are better than the market risks. They may also be in debt, such as student loans, car loan and housing loan. This could make it difficult to invest in the stock markets.
Fear can paralyse and lead to procrastination when it comes to financial planning. These are the top fears when it comes share trading.
1. “I can lose money quickly.”
The stock market can be very unpredictable for novice investors. You could lose your money quickly. Gains in the stock market, unlike the fixed interest you earn on your savings or fixed deposits account are not linear and do not show a steady growth rate over time.
Investors’ investment value can decline before it grows. This is quite common. It is possible to be afraid of risking your hard-earned cash in such a complicated market. Fear of failure, both financially and emotionally, or being exposed as inept for engaging in something not within your area of expertise could be reasons to avoid gambling.
However, it is impossible to predict the future. Stock market and individual shares of company stock can fluctuate. Whether you’re new to investing, or an expert investor, there will be drops in the value your investments over the course of your investment journey. These drops are not something to be afraid of, however.
You should not panic if you experience sudden fluctuations in your investments. Always look at the larger picture when you track the activities of your investments. Instead of worrying about the volatility of the market, be confident in the quality and safety of your investments. If you invest in solid stocks, you will see an upward trend.
Even though the stock market can seem unstable, it actually appreciates by more than 35% over a 5-year period or approximately 7% per annum. It’s better than fixed deposits!
2. It is too difficult for a novice like me strong
Many novice investors lose money because the stock market can be too complex. However, they lack the time and resources to research the stock market to make informed decisions. They assume stock investing is only for professionals or full-time investors.
It is possible for novice investors to make money on the stock market if they follow certain rules. One of these rules is to spend at least an hour per week researching and learning about the stock market.
Diversifying your portfolio is key. This means buying stocks that are undervalued and not stock of distressed companies. Start by investing a small amount of money you feel comfortable with. It is important to allow yourself to feel some fear, and then let it go. It can be done slowly and in manageable steps.
Get help if you aren’t sure you have all the knowledge. You can find an independent financial advisor who charges a fee and will help you to make a reasonable return as well as teach you the basics of the market. This person will be there to hold your hand and calm you down if you are worried about something you have read in the news or looked at in your accounts. This is another way to conquer your fear of investing.
3. “I don’t want to invest .”
It is common to not invest in something you don’t know. You may be tempted to ignore the fact that you don’t have the knowledge or expertise necessary to invest in stocks as a novice investor.
Understanding is often a prerequisite for taking action. If you’re a novice, it is possible to buy stocks using unit trust funds, but not fully understand what you are purchasing. You may find that the fund value rises when the index falls and decreases when it rises later. You will eventually understand the correlation and be able later to invest in investments that you understand. Knowledge is power. The Internet makes it easy to access information on how to invest.
Before you make a decision to invest, it is important that you are educated about the process. Avoid investments that promise high returns, low risk, complexity, or are only available to a select few. These investments are most likely to be speculative or fraudulent. It is easy to get caught up with the latest easy way to make money. We can assure you that if you read about it online, you are already too late and more likely to be burned. Never invest in rumours, but on solid fundamentals.
4. “I need to invest .”
It takes money to e $. You’ve probably heard this phrase before. This is a common saying that stops people from starting to invest. It is a common misconception that money is required to be able to invest.
Start your investment journey starting at RM1,000
Start small and build up your returns slowly over time. You can also start small and gradually increase your investment by using the cost averaging technique.
What can you do to overcome your fears?
It is a good idea to research the stock market before you invest thousands of Ringgit in it. Avoiding risk is not the best way to invest.
Stock investing can be a difficult business. You can see why someone who is not an expert in stock market investing might feel scared watching the stock markets fluctuate. Before investing in the stock market, there are a few things investors need to know.
- Decide what you are looking to achieve, how long and how high the risk. This will help you choose the right stocks.
- You must accept that the market may not always be in your favor and that your investment might fall. It is important to understand your tolerance for risk and not just your appetite for reward.
- Investors should review the fund factsheet to understand the structure of an investment.
- Before making any investment decisions, seek out independent and accurate advice from a financial advisor.
- It is impossible to predict the market. Instead, invest monthly premiums. It’s possible to eliminate the risk of market timing by drip-feeding money into. The regular premium will buy shares at a lower price the next month if the market falls.
- To smoothen out market bumps, investments should be kept for at least five year. To ensure that investments are meeting expectations, they should be reviewed every six months. If they are not performing as expected, find out why and make any necessary changes.
Investments have risks. However, if you understand what you’re investing in, it will be easier to calculate the risks and manage them better.
There is no risk and there is no return. If you wait too long to start investing, you may not achieve your financial goals. Those who aren’t familiar with investing might end up losing their money. You can win with your investment challenge!