Camille Van Vyve
23 Oct 2024
What scares investors the most: 5 common fears
Investing can be a source of prosperity, but also anxiety. These fears sometimes prevent even the most experienced investors from making rational decisions. In this article, we explore the most common fears among investors, and more importantly, how to overcome them... in order to stay focused on long-term financial goals.
Market volatility
Rapid and unpredictable price fluctuations, especially in stock markets, can be a major source of fear.
Remedy : Smoothing investments over time, using the "dollar-cost averaging" method (investing a fixed amount regularly), helps reduce the impact of short-term fluctuations.
Economic and financial crises
Recessions, banking crises, or rampant inflation are unpredictable events that naturally frighten investors, as they cause widespread losses across multiple asset classes.
Remedy : Diversifying investments across several asset classes (stocks, bonds, real estate) and globally helps mitigate the impact of a localized or sector-specific crisis.
Business bankruptcies
Scandals or bankruptcies of even well-established companies can scare investors who lose confidence in their investments.
Remedy : Diversifying positions within a portfolio of stocks or ETFs helps avoid being too exposed to a single stock or company.
Fear of missing out on opportunities (FOMO)
More and more investors feel the pressure of “missing out” on profitable investment opportunities, especially with the rise of cryptocurrencies and other fast-growing trends.
Remedy : Having a clear and disciplined strategy, based on long-term objectives, prevents being swept away by fleeting trends.
Fear of investing at the wrong time
This is a common fear, often leading to inaction. Investors hesitate to place their money for fear of seeing the value of their investments drop soon after, or of investing when the market is overvalued.
Remedy : Adopting a regular, long-term investment approach helps reduce the risk of poor timing. The market tends to grow over time: the key is to be in it!
Invest without fear with Easyvest
With its index investment strategy, Easyvest does everything possible to limit its clients’ fears. Our portfolios are invested in global stock and eurozone bond ETFs for maximum diversification. They are built for the long term, without the need for regular buying or selling decisions. Finally, the regular payment feature allows for a disciplined, time-smoothed approach to minimize the impact of market volatility. Interested? Get a simulation on our website or book an appointment with one of our wealth managers.