Whether you’ve started a new job, are an experienced professional, or are a business owner, you must have heard the classic wealth management advice from your peers/mentors/family: “Invest to grow your wealth.” While I agree with this school of thought, I’m also aware that the words ‘investment planning’ are horrifying to many.
However, in my experience, this fear exists for three reasons:
- A lack of knowledge about investing
- The negative thought of ‘what if I lose all my money?’
- Lack of proper guidance or advice on money matters
If you find your fear belonging to these categories, you are not alone! As with many things that often scare us, creating an investment portfolio might feel like a lot to deal with, but you will get better with time.
If you wish to break free from the investing fear and not lose the opportunity to build your wealth, here are three tips listed below.
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1. Get A Financial Advisor On Board
Let’s say you want to build a house on a plot of land. Do you start buying bricks? No. You will consult an architect or a civil engineer who designs a blueprint based on which the house is built. Apply the same logic when it comes to your investments.
One of the most foolproof strategies to get over your investment fear is to get professional help. Qualified advisors with deep knowledge and experience will handhold you step-by-step towards managing your investment portfolio the right way. The additional cost is small compared to the results you will see in the long run.
2. Start Exploring Investment Planning Resources
I strongly recommend you explore rich resources, like financial blogs, money management books, and interesting podcasts.
However, just like you wouldn’t make any major life decisions based on what you read on the internet, avoid taking advice from google for your financial journey.
Once you start learning about the investing process, its dynamics, environment, and expectations from you as an investor, your fear will start taking a back seat. As part of smart learning, discuss your findings and thoughts with your financial advisor and see what they advise. Exchanging information will help you discover new things about managing an investment portfolio and pull up your confidence meter in this area.
3. Take Baby Steps To Manage Investment Portfolio
It’s time to face your investment fear; because that is the only way to get rid of it. With your financial advisor’s guidance – first, take baby steps. Set a small amount of money you don’t require.
Next, diversify your investments and observe how you feel about the process. What you are feeling will be unique to you, and the best way to understand your risk tolerance and attitude is through documenting your journey.
For example, you invested $10,000 in the stock market, and it fell by 10% the next day. How did that make you feel? Alternatively, if the $10K performed well, how did that make you feel?
Understand your emotions and write them. The idea to make you do this exercise is to help you discover your investment profile, i.e., what type of an investor you are.
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5 Bonus Tips To Build Your Investing Confidence!
The three tips listed above form a cycle that will free you from the fear of investing with time. Of course, you must regularly follow them to experience positive results. However, to help you fight your fears further, I’m sharing some effective bonus tips that are worth your time & effort:
- Improve your general knowledge.
Be familiar with what is happening in your country, across the globe, different industries, and previous market performances. This wholesome approach will help you make smart and wise investing decisions. Investing well is about understanding how the world works around you.
- Follow a non-biased approach.
Try to make objective decisions and listen to your gut. Investing is about being rational, objective, and based on your understanding. Doing that regularly only leads to better intuition. But one cannot invest based on intuition only.
- Go slow and have a positive approach.
Getting over fear is not an easy task, but be proud of yourself to take the first step! Motivate yourself and surround yourself with supportive people who celebrate your progress. Be an optimist. If you are constantly fearing the worst, then you will never be a successful investor, in fact, you will rarely be successful in life in general.
- Remember, market volatility will exist.
Your investment portfolio will record highs and lows, but don’t let this get to you. Sit with your advisor and discuss the results. Try to maintain your calm when conducting future investing planning. It will all work out!
- Diversify your investments.
Different instruments will call for different rules, so pay attention to them and spread out your investment to minimize your losses.
If you’re ready to explore the investing world and want financial assistance for the same, let’s set up a call to onboard you in this journey.