8 Steps to Overcoming Investment Fear
There is fear of both losing money, and making mistakes that ultimately cost you in the end. Luckily, there are a few tips and tricks you can use to eliminate any "fear-based" hesitation and to subsequently become a successful investor.
Step 1: Educate
Having knowledge is an essential asset to becoming successful. When you are educated on the market, as well as the stocks within it, and learn what to watch for, you will gain an understanding of when to buy and sell. You will feel much more comfortable making decisions and should become more confident with the choices you make.
Step 2: Set Goals
Where do you see yourself in a year? Five years? Ten years?
Setting these goals for yourself allows you to overpower fear with determination. Once your desired outcome is set, you put yourself in a compelling and motivational place. As an added bonus, you have laid out a timeline for your journey.
Step 3: Look at the Big Picture
Take a step back. Re-evaluate. Look at what you have to lose while focusing on what you have to gain.
Investing in the stock market is not as terrifying as you may think. The more educated you are on the topic, the easier it will be to evaluate the options.
Step 4: Start Smaller, Get Larger
Don’t be afraid to start small. Begin with tiny sums of money so you don't risk too much while you are still learning.
Once you get more confident, investing larger sums of money will become the next logical step. With greater amounts, you may be able to generate larger profits.
Step 5: An Investment Strategy
When you have a plan, executing it is simple. Look into some examples of various trading strategies online, and apply your own skills and approach and preferences.
Many strategies may help you excel, while others could potentially be confusing and counterproductive. This is the point in which you should slowly adjust your approach over time so that you refine your own personal strategy until you are comfortable with it.
Step 6: Simple Approach
Keep the strategies simple. When your investment approach is simple, you are less likely to become overwhelmed or to back away.
In addition, the easier your plan, the easier it will be to spot issues, and make slight adjustments to any specific aspect; type of companies to trade; price per share; duration for how long to hold; methods of analysis.
Step 7: Just Jump In
Sometimes you just have to bite the bullet and submerge yourself in something you may not be completely comfortable with. Once you start taking the steps along your new journey, the path will become clear.
For a new investor, this will feel like walking into the fog. From a distance your vision is cloudy, but as you move closer you will be able to see the road.
The more prepared you are, the easier you will find this phase. When you have a rough idea of your goals and approach, you will see more clearly the way to get there.
Step 8: Don't Become Discouraged
Sometimes not everything goes as planned. However, keep in mind that you will learn more from your mistakes, than when you actually turn a profit!
Get back up and start again. Use your strategies mentioned above to diminish any fear that may have arisen. Accept the situation, welcome all the things you learn (both the good ones, and the bad ones), and use all of it to make smarter decisions in the future.
From here it is up to you. If you want it bad enough, you will find a way to conquer your fear. Use these steps to gain confidence, not to procrastinate.
Everyone has to start somewhere. Some have more time to dedicate to learning than others, some generate better results, while others still are more "mentally gifted" at investing.
However, no matter your situation, you can always do better than you have. There can always be an improvement, and this is the personal aspect upon which you should focus.
At the end of the day, everyone started somewhere. The measure of progress is how much each individual has improved over time.
Now take these eight points, and continue to become more comfortable. Continue to grow as an investor and your profit will grow alongside you.