Investing can seem daunting, but it doesn’t have to be. Here are 3 steps to help you stop being intimidated by investing.
We understand – investing can feel daunting. It actually can feel like walking on a tight rope across the Niagara Falls on a windy day.
If you watch the news or read about finance online (it’s pretty hard not to), it probably isn’t helping. While the news is certainly helpful in some situations, having your eyes glued to the television or your tablet/smartphone probably won’t ease your worries.
Think about it; on CNN, Fox News, MSNBC and countless other stations, we get a nightly report on how the Dow Jones Industrial Average, NASDAQ and S&P 500 fared that day. And sometimes that news is filled with doomsday predictions. At the same time, there are terms like call options, liquidity, and hundreds more being thrown around at a million miles a minute. It can make your head spin!
However, has anyone ever told you in easy to digest terms what these measure, or what any of this actually means?
We’re about to break down some basics on why you shouldn’t be intimidated by investing, and how to get started (with baby-steps):
With the news it can seem like the stock market is going into a freefall that will never, ever recover. But many of these reporters would be out of a job if they finished the whole story. Relying on viewership means catchy headlines and making everything seem compelling (even if it’s negative).
The truth is; despite any market catastrophe – from the Great Depression to our recent mortgage crisis – the market hasn’t just recovered, but it’s reached a new all-time high.
Sure, if you are retiring next month a downward market may not be ideal, but if you are investing with a long-term plan, this can make investing less stressful, and more successful.
In it for the long-haul
Just like those characters on romantic comedy TV shows, the stock market can have some commitment issues.
Trying to time the day-to-day activity and ups and downs of the stock market usually leaves most people in the dust.
Look at when the market is going up – by the time it’s gone up your reaction would probably be to buy in. But have you ever heard the phrase “buy high”? We didn’t think so.
The same holds true for when the stock market is going down. Selling when your investment is losing value is probably not a way to create wealth.
Investing isn’t a “set it and forget it” type commitment, but you can and should realize that you don’t need to follow the intimidating roller coaster we see on television.
Another misconception is that you have to dive into the deep end, and that you have to become a slick-talking Wall Street executive to start investing.
The good news is that a realistic financial plan involves baby-steps, not a plunge straight into the deep end. You don’t start exercising by hitting the bicycle for an hour at full speed and then lifting 100 pound dumbbells; you start small and work your way up.
So start with these 5 basics we’ve compiled, like saving enough slowly, and creating goals for your future. Soon enough, you’ll be well on your way to being empowered financially!
Penny for your thoughts
Share your plans to start investing, or your best tips on how not to be intimidated by investing. The LTH Tribe wants to hear from you!