Overcoming the Fear of Losing Money
None of us want to lose money. And in an ideal scenario, you won’t have to worry about it.
But keep this in mind: Your portfolio will never go straight up.
That means as your account grows, you still apply this number to it. Even though you are playing with money you have grown over the years, don’t let that adjust your risk management strategies — you want to continue to sleep stress-free.
Look, there are a million ways to invest. Before you jump in, though, you need to figure out your risk level, and then you can determine which strategy will work best for you.
For example, if you are only willing to lose 10% of your overall account, then you may not want to invest in a strategy that sees wild swings. It could be too much volatility for you to stay in positions, as this number means you are likely a bit more conservative.
Simple, stock-based investments are what you are looking for.
If you’re less conservative and willing to risk a little more, maybe 20% of your account or more, then you should be more comfortable taking a higher-risk, higher-reward strategy. That could include stocks, but also options.
You have to overcome the fear of losing money to ultimately make money.
The growth the market has accomplished just in 2017 was remarkable, and it’s going to be much higher if you are investing for years and utilizing market-beating strategies.
Chad Shoop, CMT
Editor, Automatic Profits Alert
Investing has consumed my life since college. While double majoring in finance and economics at the University of North Carolina at Greensboro, I founded the university’s economics club, joined the finance club and participated in the Chartered Financial Analyst research competition to represent our school.