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How to Handle Investment Fears
If you invest in the stock market, you need to know that you are going to experience bumps along the way. For a great majority, nothing beats the thrill of being aware that you have made a bundle investing in a particular stock or fund. However, when the stock market starts to drop, investment fears begin to come into play. Those fears can override your capacity to handle your money and investments with success unless you confront them directly.
Warren Buffett’s Thoughts on Investment Concerns
Pay attention to what financial guru Warren Buffett advises:
- Buffett counsels people who put their money into the stock market to do so as part of a long-range plan. You must accept the fact that you may incur a few short-term losses in order to achieve your strategy of attaining long-term profits in the future.
- It is interesting that Buffett theorizes that greed and fear are two of the most important factors people experience when they invest money in the stock market.
- Warren Buffett thinks that people do not understand how to control their emotions during periods of extreme stock market volatility. Smarter investors do quite the opposite of what the vast majority of investors are doing.
Proceed with great caution when all of the “experts” say that a highly successful bull stock market is never going to turn into a bear market. Basically, do not follow along with crowd when it comes to your investment portfolio.
The greatest opportunity to make money in the stock market is to invest during a bear market when prices are down and every person is worried about losing money. This person’s explanation is that when stocks cost less money in a bear market, investors who plan to invest money for several years will end up making profits.
Additional Points to Consider in Regard to Your Investment Fears
- The stock market will have its rises and falls.
Recognize that stock market investing does not really have any real predictability. Everything is what it is. Even the best stock brokers and analysts do not have investment crystal balls that enable them to predict stock market trends with 100 percent accuracy.
- One word of caution to smart investors: Contemplate on ways in which you can implement Warren Buffett’s investment strategies to your particular portfolio.
- Consider your current situation: Unlike someone who is at the beginning of his career, you may be at the end and not able to take large risks in the stock market. Nonetheless, if you have a number of year left in which you plan to work and save money, you may find that Warren Buffett’s approach is a good strategy for you to follow.
- Take a strong stand regarding the diversification of your investment portfolio. If you learn to diversify your investments, you will have a certain amount of safety that protects you from losing a lot of money during bear markets.
- Do not allow your fears to run wild. It is better to take advantage of investment opportunities that enable you to receive profits in the future than to abstain from investing any money in the stock market.
Confronting and Handling Your Investment Fears
What are the best ways that can help you lessen your investment fears?
Give these strategies a try:
- Simply recognize fear as being a very normal human emotion. You are likely to experience fear at some time in your life and in situations that vary.
- Fear is not always a bad emotion because if something inside of yourself tells you that you need to be afraid, this feeling could be a warning that danger is near. However, if you have the ability to understand the reasons why you have an investment fear of the stock market, you may end up receiving greater profits in your investment accounts.
- Learn to maximize your gains and incur fewer risks. Constantly remember that your chances of losing huge sums of money are greatly diminished when you create a diversified investment portfolio containing a variety of different types of stocks.
- Make sound investments even in spite of the fears you have.
Completely research your investments and allow “Feel the fear and do it anyway” to become your very own personal mantra. If you make the right investment moves, you will see a growth trend in your investment, and this alone can help you feel less afraid of the outcome.
Make one or two investments when prices have decreased, just as long as you have the years to watch your money grow.
As your profit increases, make a few more investments. If you develop the habit of investing on a regular basis, you will not have as many fears.
If you want to have a good investment strategy, learn how to master investment fears that make you believe you are going to lose all your money. Studying the advice of market authorities such as Warren Buffett and looking at your own feelings about money and investing can help you move from being paralyzed by fear to confidently putting together your own investment portfolio.