5 Tips for Overcoming Fears About Investing in the Stock Market

Overcoming Investing Fears

The number one source of opposition that I get from my financial coaching clients is their fear of investing in the stock market. Once I help them develop strategies to pay off their debt so that they can begin building wealth they usually want to stop at simply saving money. While I always recommend having liquid emergency funds in store, this is not a sufficient tool for building true, sustainable wealth.

In order to build wealth quickly and efficiently it is important to invest. There are many ways to invest your money to make it grow fast. You can invest in real estate, a business, the stock market, etc. But one of the quickest and easiest ways to start investing is through the stock market, which many people are afraid of. This is especially the case for individuals who have just finished paying off debt and are anxious to set aside extra cash for the future.

And this is completely understandable. I once had these same objectives when I was fresh out of debt, however, I quickly realized the value of investing my money after taking a few steps to overcome my fears. Since that point I have found other strategies that have helped my clients overcome their fears of investing and start rewarding journeys to building wealth.

Educate Yourself About the Stock Market

Education is your first line of defense for making sound decisions in almost any endeavor. Investing is no different. The more you know about the stock market and how it works, the better equipped you will be for selecting sound investment options. Proper education can easily dissipate your fears about investing in the stock market.

When I first decided to invest I spent about a year figuring out how the stock market works. These are some of the things that I did to educate myself about the stock market:

  • Signed up for a paid online investing class
  • Frequently watched the Bloomberg channel
  • Watched YouTube videos about investing
  • Read books and online articles about investing

It took me about a year to start investing because I wanted to pay off my debt before I got started. At the time I had quite a bit of revolving debt that I wanted to pay off. I knew that I wanted to invest once all my debt was cleared so I started my educational journey very early.

It doesn’t take this long to become adequately educated about the stock market though. With the right tools and resources and adequate time you can easily learn investing basics within a month or so. There are plenty of free and paid investing resources available in-person and online. You can easily find tools to suit your personality, budget, needs, and desires. So one of the first steps you should take to ease your fears about investing is to educate yourself about the process.

Use Stock Market Simulators

When I first started investing stock market simulators were not available to me. Or at least I was not aware of them. However, these handy tools have grown in popularity over the years. They are basically a way of allowing you to invest virtual or “play money” in the stock market to see how your investments can grow over time. These tools are a great risk-free way of getting acclimated to the stock market without taking major risks with your money.

Open and Fund a Brokerage Account

This is one of the first measures that I took when I decided to actually start investing in the stock market. I opened a brokerage account with a $100 deposit. I didn’t know what to invest in at first so I started doing a lot of research while my money sat in the account for 4 months. The firm that I used automatically puts deposits in an interest-bearing money market settlement fund. So my money was growing at about .25% each month as it sat in the account.

I received monthly email statements that constantly reminded me about the account. This encouraged me to keep doing my research so that I could figure out where to invest this money. Once I finally decided which investment products where right for me I added $900 to my settlement fund and began trading. Thereafter, I became hooked on the stock market once I realized its wealth building potential.

Overcoming investment fears

The key to this strategy is to add funds to your brokerage account. Many brokerage firms allow you to open an account with no initial deposit. If you do this then you won’t be as compelled to do something with your money. So as soon as you open your brokerage account fund it with an amount of money that is comfortable for you. You can start trading whenever you are ready.

In addition to kick-starting your investing ambitions, opening a brokerage account can give you access to valuable investing educational resources. Many brokerage firms provide a number of useful educational tools such as articles, videos, webinars, etc. to their clients. As such, you can utilize these to grow in your knowledge and awareness of salient investment strategies.

Choose Low Risk Options

Another tool that you can use to ease your fears about investing is to put your money in low risk investment vehicles that guarantee a return on investment. Certain investment options such as certificates of deposit (CD’s), money market accounts, and bonds allow you to safely start your investment journey.

You are guaranteed to get your initial investment back with these types of accounts in addition to some interest. However, the interest payout is generally quite lower than what you could get when investing in stocks. Low-risk investment options typically result in lower dividends or payouts. But this is still a great way to get your feet wet and to diversify your portfolio.

Start Small

Another strategy for decreasing your angst about investing in the stock market is to start small. You do not have to pour your life savings in the stock market. In fact, this is a bad idea even if you are an active investor. You should always leave cash in an emergency or reserve fund.

Many online brokerage firms allow you to invest as little as the per-share cost of a stock or exchange-traded fund (ETF). This could literally be as low as $2. Like with other low-risk investment options, the payout is typically lower with smaller investments. But the goal is to ease your way into the stock market – you can always add to your portfolio as you become more comfortable with investing.

10 thoughts on “5 Tips for Overcoming Fears About Investing in the Stock Market

  1. If there is anything that will make one achieve in and overcome fear in invest, it nothing but knowing the successful tips to overcome it. The ability to even take risk in investment market makes one gain beyond expectations. Thanks for this good posts.

  2. There is a lot of fear when it comes with investment, especially when one makes a wrong investments. One really has to do a lot of research on the company and the stock one wants to invest in so as not to lose money. The above tips are also an eye opener when it comes to investments.

  3. Atimes to start small looks like a long way to success land but believe me, I have been there. To prevent heart attack or pressure , start small and put in money for plan B.

  4. To start mean a lot and its gonna take you to a better result stage. Either small or large startup, always focus on achieving the best out of your investment. The truth is while you are investing, also learn to have savings because you expectations might not tiled as expected. Thanks for this cool tips presented here in this post.

  5. Even guys after reading, greed allows me enter into stocks that later skill my investment. We should read books and follow low risk investments even though not a get rich scheme immediately. Thanks guys for this great piece

  6. Investing in stock market as always being my greatest fear. I’m pretty sure I’m not the only one having this fear. I quite agree with the writer. Learning more about stock market will enable one know the nitty gritty of it. Its best to take ones time and really learn about stock market and that’s exactly what im going to do. I just don’t want to dive into it blindly. It will be like taking a shot in the dark. your tips for success in stock market is sure useful .thanks for this post

  7. The writer’s opinion in this writeup is well supported by me because its is nothing but the right way to successful stock market. I will definitely invest as I have gotten the ideals and tips on how to overcome fears in investments. I really love this

  8. The stock market can be quite intimidating if you know nothing about it. The key is to take time to understand how it works before delving in

  9. More young people need to educate themselves on how the stock market works. It’s a skill that can more than pay off in the long run

  10. Nowadays we have handy apps like Robin hood that have made the stock market accessible to the masses. It has never been easier to get into stock trading!

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