Top 5 Things Investors Are Most Worried About

Worry, like fear and pain, can be purposeful. The trick is to understand why it’s there and how to respond to it. When it comes to investing, worry can be ineffectual and harmful, especially after the money is invested. Thorough research, developing a solid plan, and following through should put an investor’s mind at ease. The issues that investors fear most are either avoidable or a non-issue in the first place.

Total Financial Ruin

Recessions, depressions, stock market crashes, and other economic horror stories are great fuel for investor worry. Along with superstition, it is responsible for investors making mistakes like micro managing and second guessing the nature of luck. The economy and the stock market are going to ebb and flow through high and low tides. Fanatically and consistently watching stock or intermittent economic crises is only going to produce nervous days and sleepless nights. Staying away from the hot unsubstantiated tip goes a long way in ensuring peace of mind.

The Powers That Be

When the experts at the Wall Street Journal or the gurus, like Warren Buffet or Alan Greenspan, endorse a particular stock or support a particular economic theory, lesser investors scramble to fit whatever paradigm they set in motion. The truth is, long-term investments, approximately ten to fifteen years, stand the test of time and weather the storm of individual opinions. You owe it to your solid initial plan to let it run its course and realize its potential payoff.

The Wrong Time to Invest?

October 29th is the investor’s Friday the 13th. The January Effect, the  October Effect, and even the Unlucky Sevens (years ending in sevens) are fears that investors have incurred over the years. The fear is real, but the panic need not be. These times of year come and go, and you should not base your investments on so fickle a thing as superstitious beliefs.

Stocks to Sell and Stocks to Keep

When a stock proves to be a dud, then you should drop it, count your losses, and use it to reduce your taxes. When a stock is a rising star, then you may want to rush and sell it to collect a quick profit, or rush to trade more and make larger investments in that stock or similar stock. You couldn’t be further from what investing is all about. A solid investment plan will include a strategy for selling. If you sell for the reason you planned, then what the stock is doing is irrelevant.

That Great Tip

Investors are everywhere and everyone has a wonderful tip. You trust the story, or the person telling it, and you invest, then you suffer buyer’s remorse. Storytelling is a mental phenomenon that human beings share. We love a good story and want to be a part of it. When it comes to investing, enjoy the story about the unbelievable tip, but don’t let it lure you into a poor and costly investment. Do the work, read the research, and stick to the investments that have the statistics and track records to back up their worth.

Most financial professionals agree that no matter what or how you invest, saving money is always going to be a key factor in future security. Trust that costs will increase and prepare accordingly. Creating multiple sources of income, setting aside emergency funds, maintaining good credit, and staking in diverse investment types are your best bets to financial success.