Are You Afraid of Investing in the Stock Market?

February 21, 2018
1116 Views

Heightened volatility in recent weeks has made worldwide stock markets interesting, but may have also turned off a number of potential investors. If you’re someone who has been looking to start making investments in 2018, but then saw huge selloffs on wall street, then you might be afraid and have put your plans on hold.

Is volatility a good reason to stay away from the stock market? Or does this mean it’s the best time to look at new investments?

A recent survey from BlackRock Research found that up to 70% of Millennial investors were keeping their cash assets close. Many feel that the volatility in the stock market is not worth the risk at this time, and they’re waiting for the opportunity of a lower entry point.

The problem is that it’s very hard to know when the market hits its absolute bottom. With every close of trading, there’s always the risk that tomorrow will bring another period of growth. Investors that always wait for that best opportunity to buy-in, are usually the ones that will miss out.

Stop Focusing on Short Term Gains

One way to get over the fear of volatility is to stop looking at the stock market as a place to make huge amounts of money in a short period of time. All of the wealthiest investors are in things for the long run, and while they might sometimes take partake in the trade of undervalued stocks to make short or mid-term profits, they will still have investments in other stocks that they see as long term winners.

Apple is an example of success that is regularly brought up in the stock market. This is for good reason. In January 2002, Apple started trading at $23.30 per share. Ten years later, it grew to $61 at the start of 2012. Today, Apple is trading at $172.09 per share, which is close to the highest price the stock has ever traded at. Although Apple took dips at times of economic downturn and stock market volatility, the stock has always paid off for those that have stuck with it.

Not everyone in 2002 knew that Apple would become the most valuable public company in the world, but there are many who saw the growth potential of a consumer-friendly brand in the rapidly growing tech market. Other tech stocks have shown incredible growth and resilience in recent years, with companies like Amazon and even Microsoft proving that they can still be valued high amidst what many are calling a stock market crash.

So what’s the lesson here? don’t be afraid!

Learn about growing companies that have long term market strategies. Don’t just learn about stock price history and don’t be afraid, but also learn about what a company offers and why that product could matter in the future. Even when the stock market is at its worst, there will be stocks that are performing at their best.

Long term investment in stable stocks and powerful brands can result in significant future gains for use in retirement or for reinvestment.

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