Are You Afraid of Investing? Here are 6 Reasons Why You Shouldn’t Be

17 June 2021

Investments play a crucial role in achieving financial goals and financial independence. However, investment in the Philippines has yet to catch on. Only a little over a third of Filipinos use investments to fulfill their financial goals, with more than half still relying on budgeting and planned purchases.

It can be scary for many to take the first steps to stock investing, especially when misconceptions about it are still passed around as fact. While it’s valid to be afraid while doing something new, it shouldn’t get in the way of growing your money.

6 Reasons Why You Shouldn’t Be Afraid to Invest

With a little calculated risk, you can bring yourself closer to hitting your financial milestones. The following are the various reasons why investments are nothing to be afraid of.

The stock markets always bounce back
Investments can seem terrifying in the face of the stock market’s extreme ups and downs. Current events, industry trends, innovations in technology, and socioeconomic climate all play a part in market fluctuations. The stock markets dipping low is an unavoidable part of dealing with investments.

However, there is a silver lining—these markets recover from their lows and may even reach new record highs. With the right knowledge and strategies, these lows don’t need to equate to heavy losses on your end.
Investments can start small
Another factor that makes investing intimidating for newcomers is the amount needed to invest. With the wide variety of options available in the market, you may feel like you don’t have enough to start. The idea of putting a significant amount of money in an investment that may devalue can also be terrifying.

Nowadays, there are more affordable and accessible investment opportunities, such as investment and insurance plan hybrids. You can choose to invest a small enough amount you’re comfortable with to lessen your risk while familiarizing yourself with how the processes work.

Once you’ve gained your confidence, you can start working towards larger amounts and risk tolerance.
Risk is normal, and returns are higher
In relation to the previous point, fear of investing can arise from the anxiety of losing money, especially for those who do not have any safety nets. Some people are afraid of taking these risks because their potential mistakes may result in catastrophic losses.

In truth, assuming risk is part of the investment process—what can be controlled is the amount of risk you choose to take on. Even relatively low-risk investments can yield high returns. After dipping your toes in “safer” ventures, you can choose to re-evaluate your risk tolerance and adjust your investments to match your financial goals.
Knowing more protects you
Trust is a critical factor when choosing where to invest your money. The market is filled with both good and bad parties, with the latter taking advantage of a newcomer’s naivety and cluelessness for their gains. Combined with the misinformation passed around in social and digital spaces, investments can seem like they do more harm than good.

As the old saying goes, knowledge is power. Actively learning about investments through reputable sources can protect you from unscrupulous situations. It can also help you better understand how investments and other financial concepts work and empower you to make financial decisions that best fit your goals.
You learn more through practice
Taking your time in learning concepts that affect your financial milestones is essential for reaching and streamlining these achievements. However, out of fear of making mistakes, many get stuck in the preparation phase.

One of the best ways to apply the financial knowledge you’ve gained is through actual use. Nobody can be perfectly and thoroughly prepared for any sort of venture, including investing. With enough practice, you’ll better understand how investments work and put your theoretical knowledge to the test. This can help you ease any fears and anxieties you may have.
Strategies prevent major failures
Like with any financial venture, a mistake can cost you a fortune. For those looking to invest in growing their funds, the fear of losing so much of their hard-earned money can hold them back from taking the plunge. This fear is worsened by the volatility and unpredictability of the stock market.

Careful planning and the use of certain trading strategies can help improve your chances of success. At the very least, these strategies can help mitigate your losses from becoming major fails. Using simple and straightforward strategies can make investing easier for newcomers and help shape your overall method for future opportunities.

It’s Time to Try Investing

In the bigger picture of personal finances, investments are a guaranteed way to help your savings grow. By improving your financial literacy, you can conquer your fears and let your investments bear fruitful returns.

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Are You Afraid of Investing? Here are 6 Reasons Why You Shouldn’t Be

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