How to calm your anxiety and start investing, according to a financial planner
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- A financial planner says the first step for beginners to start investing is simple: education.
- Taking the time to learn about investing before spending any money or assuming any risk helps beginners understand the market, adjust their expectations, and calm any anxiety.
- Learning could mean speaking with a financial advisor - or it could mean checking some books out of the library or taking advantage of free resources online.
- Visit BusinessInsider.com for more stories.
"The key to calming nerves is setting appropriate expectations," Molly Stanifer, CFP®, financial advisor with Old Peak Finance, told Business Insider. Luckily, understanding what to expect begins with a simple step: education.Before investing, Stanifer suggests talking with a professional financial advisor about what to expect from an investment so you can know what you're getting into, as well as doing your own research from reputable sources.
"Read some books on the basics of investing," Stanifer said, or, if you're saving your dollars to invest, check out resources available online, like this summary, which Stanifer recommends.Only after taking the time to understand how the market works, why fluctuations happen, and what your different investment options are will you be more ready to withstand the ups and downs that often come with investing in the stock market.Advertisement
When researching, "focus on the market you are considering investing in, not a particular product," Stanifer added. For example, look at an overall index - a measurement of a section of the stock market computed from prices of selected stocks, generally used to track performance of those stocks - of historical returns, and make sure you are reviewing the right index, as well.
"If you are thinking about investing in bonds for the first time, review a bond market index," said Stanifer. "If you are investing in the entire global stock market, make sure the index you are researching includes US and international stocks of all company sizes."Need help with your money? SmartAsset's free tool can help find a financial planner near you »Advertisement
Once you're comfortable with your understanding of what to expect from your investment and you have considered the likelihood of a particular investment being able to get you to your overall financial goal, it will be easier to make the move to actually put money into the market.
As far as how much to start investing with, "it depends on your overall goal, but make sure your current essential expenses are covered before limiting your cash flow too much toward future goals," said Stanifer.After making the decision to invest, you'll need two more things - patience and a little self-control.Advertisement
Ready to invest? Consider these offers from our partners:Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.Advertisement
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