4 Ways to Conquer Investor Paralysis
Amanda Carrozza is a freelance writer and editor in New Jersey.
To overcome indecision and procrastination when it comes to investing your hard-earned money, start small and enlist the help of an expert.
You’ve made the decision to invest. Congratulations! Investing is a smart way to grow your income and prepare for the future.
But deciding to invest is different from actually buying stocks or devoting a percentage of your income to an IRA. The limbo between wanting to invest and doing it is known as investor paralysis, and it stems in large part from being overwhelmed. And rightfully so. It’s easy to become worried that you’re selecting the wrong stocks, fearful of a looming market crash or simply bogged down with too much information.
Whatever the reason for your own investor paralysis, letting your funds linger has negative effects. Instead of procrastinating and missing chances at larger profits, consider these four ways to build up the courage and feel comfortable with your decisions.
Limit Your Research
The internet is a double-edged sword for a novice investor. On one hand, it’s easy to find hundreds of suggestions, tips and lists from experts — or people who claim to be — on the dos and don’ts of investing. With that endless pool of data, however, you can spend weeks or months sifting through contradictory information without ever investing a single dollar. Rather than a diversified portfolio, you’ll end up with a tension headache.
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While it can be extremely helpful to do a bit of research to familiarize yourself with terms and best practices related to investing, make it a point to limit yourself to a few vetted resources.
Consult With a Professional
When it’s time to pick which path of investing is best for you, consider working with a professional financial adviser. It’s OK to ask for help. Financial advisers are paid to provide investment and money management advice to their clients; let them do what they’re best at. They know the right questions to ask to determine the level of risk you should commit to, a reasonable timeline and what types of investments will deliver the best results.
Best of all, while you’re focused on treating patients for the flu or educating clients on the importance of heartworm preventives, your financial adviser is in the background monitoring your portfolio.
Face Your Fears
In the decade following the 2008 stock market crash, many people remain reluctant to re-enter the market or start investing at all. But remember that your money will yield much higher returns in an investment account than it would sitting stagnant in a savings account. Accept that there might be some bumps in the road along the way — yes, that includes some losses — but it’s all part of the ebb and flow of the market.
Take It in Steps
You don’t have to go from zero investments to a bountiful portfolio in a week. Instead, make a list of everything you want to accomplish and create a reasonable timeline. Have a 401k with a previous employer that you haven’t rolled over? Start there. Interested in opening an IRA? Request the paperwork today and create a calendar alert for next to week to complete it.
The same is true for the amount of money you invest. If your end goal is to put a certain percentage of your savings into the stock market, start with a smaller amount and work your way up. From there, add more money to a particular account or apply your funds to various investments. You can even create an investment schedule with your adviser so that you’re pre-committed but still have time before the money actually leaves your bank account. By taking an incremental approach, you’re less likely to feel overwhelmed and scrap the plan entirely.