4 tips to overcome the fear of investing in the stock market

If you are risk averse to money, then probably you would never have tried investing in stocks. Of course, most people like you refrain from investing in stocks because of the fear of losing money. To those who know nothing about stock investment, stock investment looks confusing and scary.

The financial terms and technical graphs shown on stocks do not make much of a sense to the lay investors. However, you would be happy to know that financial terms and graphs have very little to do with stock investment. Investing in stocks is really simple and straight forward. You just need to educate yourself with the simple basics to stock investment, and you will be able to pick good promising stocks on your own.

Here, are a few steps that you must take to overcome the fear of investing in stocks:

Educate yourself to invest in stocks: Generally, when you would sit down to view the stock investment on a TV channel, you would get utterly confused and feel helpless to invest in stocks. The finance lingo and the graphs would sound like ‘Alice in Wonderland.’

But as you read and learn about stock market investment, then, you would understand that stock investment is straightforward and easy. You don’t have to learn in and out of stock investment, but you must have a basic knowledge of stock investment.

Sometimes a lot of people think that they need to know about a lot of companies to invest smartly in the stocks. But, that’s is definitely not true! Who in the world has all the time to learn and read about all the existing companies in the world? Thus, knowing just a few companies is good enough for a smart investment. If you wish to learn about stock investment, you can subscribe to our course here.

A small investment is all that is needed!

Most people don’t invest in the stock market, thinking that they don’t have enough money to invest. But, what they are not aware of is that it takes tiny amounts of savings to be invested in stocks.

You must start with small amounts but try and put them in reliable truly valued stocks. Once, you start watching them grow in a few years, you gain confidence in making investments.

 So, as an investor consider putting your money little by little and allow it to grow.

Delaying can cost you a lot

The sooner, the better is a strategy that fits well in the stock investment. Imagine if you put Rs. 500 every month at the age of 20 years, then, how much do you think it will become after 30 years that is at the age of 50? Imagine if the money grows at an interest rate of 8%, then you will end up having 1.15 million Rs as consolidated money.

Just imagine how much are you losing out on by not starting to invest early. Even if you lose half of the income mentioned above, imagine how much you still make in stock investment.

Always aim for long term investment

Stock market investment goes up and down every single day. For earning sure shot money in the stock investment, you must invest for a more extended time. If you look at the past stock investment history, the great depression in 2008 led to a crash of the stock market. But, soon the stock market bounced back to normal. Please take a look at the graph shown below.

Source: Trading Economics

From the above graph, it is evident that the short term investment in the stock market is highly subjected to market risk. Moreover, even if you had invested in the year 2008, which is the year of the great depression in the stock market, you would still have fetched the right amount of money in 8 years.

So, initial hiccups do exist when you just start investing in stocks. But, once you educate yourself about the basics of stock investment, then you start making significant investments in stocks.