Fear of Investing
Fear of investing in the stock market deprives many from ever having the wealth they could safely accumulate during their lifetime. Investing in the stock market, let’s use the S&P 500 index as our example, can be a positive if you do the following:
- Allow time to work for you—only invest money you won’t need in the next 3-5 years
- Divide your money into different asset classes—stocks, bonds, real estate, etc.
- Further divide in to big companies and small, corporate bonds and government, international and US companies. To be effective use the help of a professional.
- Monitor and rebalance according to your desired level of risk acceptance. Once again, get the help of a trusted investment professional.
Although there is much more to building an investment portfolio than what is listed above, that is the bare essence of what you need to do. Not hard, but the success or failure is in the details.
Why Invest?
If you had invested $100 in 1928 in the S&P 500 index and never another dollar, and you didn’t sell in 1930 when the market dropped 25.12% or in 1931 when it dropped another 43.84%, at the end of 2013 YOUR $100 WOULD HAVE GROWN TO $255,553!!
A 10 year government bond would only have grown to $6,296, by comparison. Tough to build a retirement fund that way.
Now most of us don’t have 85 years to wait for our investments to pay off, but what if we just waited 40 years—until 1968. Even back then our $100 would have grown to $3694. That may not sound like much, but it is almost 13 TIMES AS MUCH as if we had invested in a 10 year government bond for those 40 years.
So, find a professional you can trust, allow him to learn about you … your goals, concerns, timeframes and resources … as you learn about his philosophy, style, education and experience. Be prudent and the market can be your friend.
Don’t know where to begin? Give me a call today for a free consultation. Take the fear out of investing!