Are you Ready to Invest? – Keep your Emotions in Check

According to the Bank of Montreal, two thirds of Canadian investors have trouble keeping their emotions in control when it comes time to invest. Remember, when it comes to investing, letting your emotions overwhelm you can come back to bite you. First time investors are usually afraid to take the plunge. If you happen to be one of them, it’s best that you keep the following in mind before committing to anything –

Afraid of Losing it all? Diversify

The old adage “Don’t put all your eggs in one basket” rings true here. For example, if you are hesitant about investing in mutual stocks, go for index funds. The more diverse your portfolio is the better off your investments will be.

Conquer your Fear of Investing

Fear has the tendency to make the most seasoned investors doubt themselves. You might end up panicking and selling because everyone else is. Analyzing your investment will make it less of a mystery. Take a step back and analyze your motives. Does selling your investment seem like a good idea? Maybe you should consider other options to solve your particular issue. It’s best that you reconsider if the only reason why you are afraid to sell is because things seem tough.

Smart Investment Choices go a long Way

Always invest with a purpose in mind. This will give you the chance to prepare for any financial responsibilities that you need to take care of down the road especially if you have dependants or mouths to feed. Remember, your investment choices should reflect your goals. For example, certificates of deposits can serve as low risk investments if you need to save up for retirement or need to put in a down payment for a house.

Make a Plan

You won’t be afraid to invest once you make an investment plan and stick to it. Think hard about what you want your portfolio to look like and what you want it to accomplish.

Will it help you reach your goals? If not, don’t hesitate to tweak it. You can start by analyzing what it is that makes your investments work. Once your plan is in action, it will help you understand your situation better and stay on track. Keep your emotions in check, know what your priorities are and your fear will take a back seat.

Take the First Step

Of course, you will never overcome your fear to invest if you do not take the first step. Your first step doesn’t have to be an investment either. You can start by learning how the financial market works.  Once you know what you are getting into, it will be easier for you to make a decision.

You can overcome your fear to invest if you change how you think about the prospect. It doesn’t matter whether you invest in stocks in the Canadian Stock Exchange, real estate or anything else. The process is all about putting your money to work and deciding on risks that won’t deplete your finances.