10 tips to take the fear out of investment
Does investing tempt you, but also frighten you? But it's one of the most effective ways of making your money grow. Rest assured, you're not alone! Like you, many people are paralysed by fear when it comes to investing their hard-earned money. However, with a considered approach and the right knowledge, it is possible to overcome this fear of investing. So, are you ready to thrill to Birdee? Here are 10 tips to take the fear out of investing and finally dare to take the first step.
TRAINING FOR INVESTMENT
The first step in overcoming the fear of investing is to educate yourself. The more you know about different investment options, financial markets and the basic principles of stock market investing, the less vulnerable you will feel, and the less you will be afraid to invest. Read books, listen to podcasts or take online courses to gain a sound knowledge of investing and a better understanding of how the stock market works.
DEFINE YOUR FINANCIAL OBJECTIVES BEFORE TAKING THE PLUNGE
Having clear financial objectives will help you determine which type of investment is best suited to your situation and investor profile. Whether it's to prepare for a future project, build up your assets or simply make your money grow, having clear objectives will give you the motivation you need to invest. What's more, knowing why you're investing will help you feel more reassured.
As the saying goes, slow is healthy. If you're new to investing, it's a good idea to start small. You might consider investing in mutual funds or individual stocks with an amount you can afford to lose without compromising your financial well-being. This approach allows you to limit the risks and learn gradually.
DIVERSIFY YOUR PORTFOLIO
Diversification is one of the most effective strategies for reducing risk and sparing yourself a few thrills. Investing in different types of assets, such as equities, bonds, property, sustainable development and even alternative investments, can help you mitigate potential losses.
Investing always involves a degree of risk, however small. So you need to understand that your investment could rise or fall in value at any time. The key is to accept this risk and not let fear stop you from acting. Time is often your best ally in smoothing out market fluctuations.
DRAW UP AN INVESTMENT PLAN
Don't jump into your first investment blindly. Take the time to create a solid investment plan that meets your objectives and your investment horizon (short, medium or long term). Depending on your plan, you will not necessarily go for the same investment products.
BE ACCOMPANIED BY A FINANCIAL PROFESSIONAL
Consulting a financial adviser is very useful if you're worried about making the wrong investment choices. The professional will help you to develop an investment strategy tailored to your situation and objectives. Another positive point is that you can also choose to delegate the management of your investments entirely to a financial adviser: this is known as discretionary management. You save yourself a lot of sweat, and he'll keep you informed of the returns on your investments!
KEEP UP TO DATE WITH THE LATEST NEWS
An informed investor is worth two! Financial markets are constantly changing. Even if you have opted for discretionary management, keep abreast of the latest economic and financial news on the stock market so that you are aware of any changes and major new events. On the other hand, avoid over-reacting to short-term news and rushing to make a decision that you may well regret. Invest, yes, but only at the right time.
AVOID INVESTMENTS THAT ARE TOO RISKY
Don't get carried away by investments that promise extraordinary returns at high risk, especially if you're a beginner. Favour more stable investments and take calculated risks. If in doubt, seek professional advice and avoid putting all your money into dubious investments. Rest assured, prudent investors are also entitled to attractive returns!
LEARN FROM YOUR MISTAKES
Just as it's normal to fall when you're learning to walk, investing sometimes requires you to make mistakes... so that you can get back up again! The important thing is to learn from these mistakes and use them as lessons to improve your future decisions.
Whatever your short- or long-term objectives, and whatever your reasons for investing, taking the time to learn the basics of investing is essential before taking the plunge. If fear of investing is natural, it can be overcome by following these sound advice. Investing takes time and patience, but it can be a thrilling adventure for those who are ready to embark on this path, which in the end is not so terrifying once you understand the ropes!