Being an investor can sometimes be nerve-wracking because markets can go up and down like a rollercoaster. It’s also impossible to predict anything with complete accuracy, which could leave you feeling a bit stressed and out of control. But too much stress can be unhealthy for you and your finances. Stress and fear can lead to irrational decisions, which if left unchecked, could lose you a lot of money. If you want to make the most of your investment journey, it’s important to learn how to manage any stress. Here’s a few things you could do to take back control.
Don’t always act on the news
Every time markets fall the media are quick to cover the story. This can sometimes create a panic with some investors, and they may look to sell to avoid further loss. But if markets go back up the day after then they could miss out on potential growth - and they'll lose part of their Stocks & Shares ISA allowance until it resets again in April. There’s no way to predict what the market may do next, so don’t try and time the market as you could end up worse off!
As an investor, it’s important to take anything the media are saying with a pinch of salt. It makes sense to carefully choose the media outlets you’re listening to, and do further research of your own if something worries you. Also, refreshing your Twitter feed every minute probably won’t help with any investing related stress!
Daily performance isn't everything
If you’ve got easy access to your investment performance via a dashboard or app, then try not to look at it too often. It can be very tempting but checking your dashboard on daily basis could hurt your investment journey in the long run. If you’re constantly checking on your investments, then you may start to worry over small, daily fluctuations. This could leave you feeling stressed or even lead to rash decisions.
One of the easiest things to do here is limit the number of times you look at your dashboard. This doesn’t mean you shouldn’t check it at all – it’s always useful to know how your investments are doing from time to time. But instead of doing it daily or weekly, why not do it monthly or even quarterly? If your investments are being managed for you (by a company like Wealthify, for example) then they’ll continue to be managed even if you’re not checking on them all the time.
Choose the right risk level
Investing involves an element of risk. Since returns aren’t guaranteed, there’s a chance you could end up with less than you initially put in, which can be stressful to think about. But with investing, it’s possible to mitigate risk.
You can do this by only investing what you can afford to lose and by spreading your money across a number of investments and different regions. That way, the odds of losing all your money decreases. Spreading your money is a strategy called diversification, and can be done by buying funds that contain lots of different types of investments.
Think about the long-term
If you want to feel less stressed about your investments, then try to focus your attention on the long-term. Remember why you’ve started investing. What are you trying to achieve? With market movements, it’s easy to worry and lose sight of what’s important, but investing is a long-term journey, not a short trip.
Get help from the experts
If you’re finding investing stressful, then you could always ask the experts to help. You don’t need to do it all by yourself – let the experts sweat the details, while you sit back and relax. There are many services out there that will do the hard work for you and take the pressure off your shoulders. Robo-investors, like Wealthify, will pick your investments, monitor the news, analyse market data, and make changes to your Plan, if necessary, to keep it on track with your risk level. All you’ll need to do is choose how much you want to invest, select your investment style based on your risk appetite, and breathe knowing your money is well looked after.
The tax treatment depends on your individual circumstances and may be subject to change in the future.
Please remember the value of your investments can go down as well as up, and you could get back less than invested.