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5 Financial Fears Impacting Your Investments and how to overcome them this Halloween

Alicia Schneider
Alicia Schneider
October 31st, 2022

When the weather gets colder and the days shorter, many of us start to feel a little bit anxious. For some, this feeling of anxiety is compounded by financial fears, whether it’s the money in your accounts, worrying about the future of your finances, or losing sleep over investment decisions.

If you're one of those people who gets stressed thinking about your finances, never fear! Here are a few common financial fears and some tips to help you conquer them this Halloween:

Financial fear #1: Investments taking a downturn

Investors are feeling the squeeze as stock prices fall and bond yields rise. Many are wondering if now is the time to cash in their chips and move to the sidelines.

The stock market has been on a tear over the past few years, but since the start of 2022, it appears that the good times may be coming to an end. The S&P 500 went down over 23% for this year, and bond yields are rising, which has investors worried that their portfolios could take a hit.

The problem is that no one knows for sure what will happen next. The stock market could rebound, or it could continue to fall. If bond yields keep rising, it could start to eat into the returns of bond investors.

The best thing to do in a situation like this is to stay calm and focus on long-term goals rather than making decisions based on short-term fears. Investors who are worried about their portfolios losing value should remember that it’s normal for markets to fluctuate. No one can predict the future, but over time, the stock market has always gone up. It is mainly due to the growth of the economy and the increase in corporate profits that the stock market rises over time. This means that, even if there are some short-term losses, investors who stay in the market long-term are likely to come out ahead in the end.

Financial fear #2: Making mistakes managing investments

When it comes to investing, even the most experienced investors sometimes make mistakes. While some are more risk-averse than others, even the most risk-tolerant investor can be afraid of making a mistake when it comes to managing their investments.

Making mistakes is an essential part of the investment learning process. Many investors are afraid of making mistakes because they don't want to lose money. However, if you're not making mistakes, you're not learning or growing as an investor. The key is to learn from your mistakes so that you don't repeat them in the future.

Common mistakes that investors make include not diversifying their portfolio, investing too much in one stock, not staying up-to-date on financial news, or panic selling investments at a loss when markets decline. Other times, making a mistake can also be as simple as not contributing enough to a 401(k) or IRA.

Another common mistake investors make is not monitoring investments. This is especially important in periods when the market is volatile. By regularly checking in on your investments, you can ensure that they’re still on track to reach their goals.

Financial fear #3: Inflation and market volatility

It's no secret that many investors are worried about inflation and market volatility. After all, these are two of the most important factors that can affect your investment portfolio. Many factors can contribute to this fear, including stock market performance and global events.

When the market is down, it can be trickier to make money on your investments. Global events can also have a major impact on the market and play a part in inflation. This year, the Russian invasion of Ukraine sparked a drastic hike in gas prices that was felt around the globe and led to further speculation of possible long-term inflation or even a global recession.

The good news is that there are steps you can take to protect yourself from inflation and market volatility. For example, you can invest in assets that are less likely to be affected by inflation, such as bonds and real estate. Commodities such as gold and silver are also typically seen as a safe haven in times of economic uncertainty.

Finally, diversify your portfolio across different asset classes to reduce your overall risk. Spreading your money out provides a better chance of earning returns even if one investment goes down.

Financial fear #4: Not saving enough for the future

College costs have risen 180% since the 1980s, while the cost of living in retirement has also continued to rise, meaning more people are feeling the pressure of saving enough for their futures.

As a result, many investors are now faced with the daunting task of saving for both their child's education and their own retirement. If you’re a parent who is worried about not having enough saved for your child’s education or your own retirement, there are some steps you can take to ease your fears. First, start saving now. The sooner you start, the more time you will have to let your money grow.

There are a number of ways to save for retirement, including 401(k)s, IRAs, and employer-sponsored retirement plans. Figure out which type of account is right for you and start contributing as soon as possible.

Saving for college is a bit different, but there are still a number of options available. 529 plans are one of the most popular ways to save for college. There are also a number of investment strategies you can use to maximize education savings, such as a Roth IRA, taxable investment accounts, and others.

Financial fear #5: Investment FOMO

Many investors experience a "fear of missing out" or "FOMO" when they see others making money in investments they’re not involved in. This fear can lead to impulsive decisions and regret later on. According to behavioral finance experts, it's affecting investors' decision-making and the social pressure to purchase a stock can derail an investor.

With the online prevalence of investing news, advice, and apps, investors might be tempted to jump on a bandwagon to avoid the future regret of not taking the chance. We see this a lot with certain cryptocurrencies and meme stocks, such as Dogecoin and the Gamestop saga. FOMO can be especially strong in a bull market when stocks are going up and everyone seems to be making money, but getting caught up in the hype can be dangerous.

It’s important to remember that no one knows what the future holds and there is always the potential for loss, no matter what the current market conditions are. If you're feeling the urge to make a rash investment decision, take a step back and ask yourself if it's really a good idea and if it fits into your long-term investment strategy. Is it something you've researched and thought about carefully, or are you just succumbing to FOMO?

Conquer Your Financial Fears With Vyzer

Of course, there are many other factors that influence people’s fears surrounding finances: debt, job security, and identity theft, among others. However, when it comes to anxieties surrounding your investments, there are steps you can take to overcome those worries. Having reliable information is one of the best ways to quell your fears.

While researching investments before you make them is essential, having information about your assets’ performance once you’ve already invested is an often overlooked step. Vyzer can help you gain an overview of all your assets in one place so that you can see how they’re being affected by the market, make decisions based on concrete information, and see if a new investment fits into your long-term strategy. Register today to try Vyzer free.