BlackStar Tax & Financial Services - Tax and Financial Services
My Blog

Yes, You Can Overcome Your Investing Fears

Negative headlines, 500-point-plus swings in the Dow Jones Industrial Average and economic uncertainty continue to fuel investors' fears. While some of those fears may be justified, financial advisers say you can harm your financial future if you let your fear keep you on the investing sidelines.
Here are five big fears that haunt investors and what financial advisers say you can do to overcome them:
1. Indexes Zeroing Out
Financial adviser Kurt Rozman recently met with a client who was convinced that the Standard & Poor's 500-stock index was going to end up at "zero by year-end" and that he would "go broke" if he didn't sell out of the market immediately.
"He envisioned an extremely unrealistic scenario," says the Brookfield, Wis.-based adviser.
Mr. Rozman explained to the client that for the S&P 500 to go to zero, all of the 500 largest companies in America would need to "go bust" at the exact same time and that was very unlikely to happen.
When a client is convinced of a "doomsday" scenario, Brad Klontz, a financial psychologist in Kapaa, Hawaii, encourages him or her to take a few deep breaths and repeat silently a phrase such as "relax." The client can then evaluate the accuracy of his or her thinking and look for evidence to support or refute that position. "Just because a thought comes into your mind, it doesn't mean it's true," Mr. Klontz says.
He also encourages clients to put some time between their initial impulse to react and the actions they wish to take so emotions play less of a role in their investment decisions.
2. Short-Term Volatility
After losing $400 in three months, the 24-year-old son of one of Ben Sullivan's clients decided he wanted to "bail out on stocks." Some clients' young-adult children are hesitant to invest in their company's 401(k) because their co-workers' fear of the market's volatility has affected their perspective, says the certified financial planner based in Scarsdale, N.Y.
While 500-plus point swings can be difficult to stomach, swearing off stocks or not investing in a 401(k) can be a big mistake, says Mr. Sullivan.
"When you have a 20- to 40-year time horizon," he says, "waiting to invest is likely riskier than losing a small amount in the short term."
Mr. Sullivan says he encouraged the 24-year-old to hold on to his investment strategy and recognize that when he retires, the $400 loss will be "long forgotten."
3. Investing in the Unfamiliar
In some cases, the fear of investing in the unfamiliar can be useful since there are some financial products that are too complex to understand and that investors may be better off avoiding, says Jared Kizer, a St. Louis-based investment adviser.
However, when taken to the extreme, investors may lack the diversification needed to meet their long-term retirement goals, he says.
Choosing investments just because they're familiar can also create unintended risk, Mr. Kizer adds.
For a client who invested nearly all of his life savings in his employer's stock, Mr. Kizer demonstrated how he would have a better chance of meeting his retirement goals if he invested in a variety of assets. Mr. Kizer also shared stories of investors who had lost their retirement savings when their employers went bankrupt.
4. Missing the Market
James Miller continues to field calls from some clients asking if they should "get out of the market now and get back in when things look safer."
The Chapel Hill, N.C.-based certified financial planner tells them that timing the market isn't the answer. He reminds them that when things look "safer," the market will likely be at a much higher level and the clients will have lost out on a significant amount of the upside by that point.
5. Not Having Enough Money to Invest
When clients have too much debt and too little cash flow, they often feel that they don't have enough money to invest, says Constance Stone, a Chagrin Falls, Ohio-based certified financial planner.
"It's often because the client's spending is irrational," she says.
Ms. Stone recently helped a couple in their early 30s with $132,000 in credit-card and school-loan debt scrutinize their monthly spending and find ways to cut back. In the end, the couple realized that by cutting down on expenses, such as meals out, they'd have money to save toward retirement.
"You can start small," she says.

24 Comments to Yes, You Can Overcome Your Investing Fears :

Comments RSS
anonymous on Monday, August 13, 2018 2:43 AM
awesome click
Reply to comment

bestessays on Thursday, August 16, 2018 5:16 AM
Woah, this is some amazing service that you have told me about. I would man up an assignment writing service agent on to this to get more info.
Reply to comment

family law reno nv on Sunday, September 9, 2018 2:25 PM
Where, When and Why these questions often give birth to confusions in life but anyways I liked your blog post as it has substantial material for my son's family law reno nv assignment. Thank you so much for sharing this.
Reply to comment

Echo Lyons on Thursday, November 1, 2018 5:56 AM
Regular job.
Reply to comment

Anonymous on Thursday, February 21, 2019 5:30 AM
You have done a brilliant job making sure that people understand where you are coming from. And let me tell you, I get it. Please post more updates to cure. Joint Pain
Reply to comment

q on Tuesday, May 14, 2019 2:01 AM
Reply to comment on Friday, May 17, 2019 1:00 AM
You have a great blog. This is very informative. I have learned a lot of things. I am honestly afraid of investing my money. I don’t want my hard earned money to be gone because of wrong investment. My friend is in the process of building her new business. She is a successful businesswoman. She told me that I should invest my money on her business. But as I’ve said earlier, I am really afraid. But thankfully, I found your blog. And now, I am considering investing in my friend’s new business. Thank you for sharing this! It helped me a lot.
Reply to comment

Shoulder Injuries and Arthritis Stem Cell Therapy on Thursday, July 11, 2019 1:02 AM
This is really great information found here, I really like your blog. Thanks very much for the share. Keep posting.
Reply to comment

Arm Pain Frankfort on Thursday, July 11, 2019 3:34 AM
Nice article. I think it is useful and unique article. I love this kind of article and this kind of blog. I have enjoyed it very much. Thanks for your website.
Reply to comment

Catering Mississauga on Wednesday, August 21, 2019 3:03 AM
Now a days investment is what everyone is looking for, great way to make people understand invest wisely on the right project.
Reply to comment

Knee Injury & Arthritis University Park on Tuesday, November 19, 2019 1:40 AM
Thanks for sharing helpful information, I really like your all post. I will bookmark your blog for future updates.
Reply to comment

Sciatica Pain Frankfort on Tuesday, November 19, 2019 5:06 AM
Hello admin! This is remarkable article as well as it is valuable for the entire person and I want to say that I would like to write on this subject too. You have an interesting written of this topic.
Reply to comment

Meladerm cream on Monday, February 24, 2020 3:14 AM
Great..keep blogging...
Reply to comment

Ben on Friday, April 10, 2020 12:13 AM
I have read your blog. Your is very great and cool. I want more similar topics about this post to increase our knowledge. Thanks for sharing and keep sharing. Tarps for sale
Reply to comment

Adolf on Friday, April 10, 2020 1:39 AM
Useful information that is on it. just what i was looking for and i am looking forward to reading your other posts soon. You did a great job and thanks for sharing. rubber matting
Reply to comment

how to get free gold in war robots on Monday, May 18, 2020 6:09 AM
Great article! Very informative blog. This was very helpful! Thank you so much for this!
Reply to comment

Gregory Holmes on Tuesday, June 16, 2020 3:39 PM
I have read your post and have collected lots of information on it which is very new to me I am sure yours too. So please keep posting here. I am working for Carolina Demolition Services company which provides complete demolition services after property damage and during reconstruction. We handle demolition projects after a fire or water damage has occurred and during structural remodels and additions.
Reply to comment

Charli on Tuesday, August 11, 2020 4:22 AM
This article is helpful for every visitor. I appreciate your effort. I will come back to the website to read your blogs. Thanks for posting. Keep posting. We have many types of rope barriers
Reply to comment

Neil on Sunday, August 16, 2020 3:11 PM
Your blog is very informative for a lot of people. I really like it very much. I hope you will soon share your next post about this discussion. mobile on installments for buy
Reply to comment

Alex on Monday, August 17, 2020 4:44 PM
Excellent blog Brazil Pandemic
Reply to comment

Anu on Tuesday, August 18, 2020 4:20 PM
It is one of the high-quality information that you are providing. i really like your weblog as it completely complete of informative posts. Online ebook maker
Reply to comment

Tiara on Sunday, August 23, 2020 6:57 AM
This blog is very effective and valuable. I am very glad to read your blog. Web designing online course training
Reply to comment

Jenny on Sunday, August 23, 2020 8:27 AM
Your blog is very informative for a lot of people. I really like it very much. I hope you will soon share your next post about this discussion. Click Here To Get LOOPER EYE MODEL
Reply to comment

johnsmith on Tuesday, September 15, 2020 12:31 PM
really cool and amazing post.i really enjoyed reading it. and i also love your writing style and the way you represent your article is amazing did a great job and i appreciate keep posting more articles. visit our site now to study Pay per click management professionally from google certified trainers. pay a visit now for further information.
Reply to comment

Add a Comment

Your Name:
Email Address: (Required)
Make your text bigger, bold, italic and more with HTML tags. We'll show you how.
Post Comment
RSS Become a Fan

Recent Posts

10 Things Prepaid Card Issuers Won't Tell You
Big tax mines that could blow up your return
How to Make Your 401(k) Plan Work Harder
What You Need to Know for Your 2011 Tax Filing and What’s New for 2012
How to Save for Retirement on a Low Income


Investment Ideas
Tax Topics
powered by

Website Builder provided by  Vistaprint