The best yields from investments are typically achieved from a long-term horizon. Such a scenario protracting into the future to build wealth all but naturally breeds fears and uncertainties that serve as barriers particularly for small, individual investors.
Knowing what these hurdles are and learning how to overcome them thus constitute vital steps when you’re investing in the future. With this in mind, let’s examine these common investing fears and look at some of the ways to deal with them.
Fear #1: The risks involved
The possibility of losing your hard-earned money is probably the most common fear when it comes to investing. Hence, educate yourself on the risks involved in various types of investments. Determine your appetite on what risks to take. There are high-risk investments, such as speculative stocks that could deliver handsome returns but could also generate significant trading losses if mishandled.
Learn about low-risk investments like bonds that generate guaranteed (though lower) returns. Better still, explore more stable opportunities in real estate, such as condo investments offering potent possibilities for rental investors. The valuation of a residential property, moreover, appreciates substantially over time from which you can draw profit should you decide to sell the property later.
Fear #2: Committing mistakes
An aversion to making mistakes stands in the way of many aspiring investors. You can overpower this fear through a goal-setting exercise to firm up your determination. Set in writing what you aim to accomplish within a certain timeframe.
In having a goal in mind, look at the big picture and manage the challenges toward your objective. Allow some time to re-evaluate your investment decision and take whatever adjustments may be necessary. Focus on what you stand to gain so that you’ll stay motivated.
Boost your confidence by learning from expert investors and drawing lessons from their success stories. Attend lectures and seminars about investment, and avail of widely available online resources on investing.
Fear #3: Lack of capital
The mindset of ordinary folks is that investing is a domain reserved only for the wealthy who have the cash to spare. But break away from this thinking and don’t be intimated by the lack of capital. Grow your appetite for investing and lay its foundation on a habit of saving regularly.
Even with a small amount of savings, you can start small on pooled investments like mutual funds. This strategy is also a way for you to learn more about investing, increase your savings, and eventually move forward much wiser in searching for larger investment opportunities later.
Fear #4: Market scams
The world of investing, while potent with opportunities, is also rife with scammers who prey upon the gullible investors. But don’t let the market presence of these untrustworthy players deter your investing goals. Be smart when investment schemes come your way.
Check and double-check if investment offers you receive are duly registered with government regulators. Shy away from those with returns too good to be true, as in all likelihood these are scams. Oftentimes, the modus here is to entice you with handsome initial monthly paybacks that soon disappear along with the money you sank in with the investment scheme’s principal founder.
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