Investing Brokerages & Advisors

15 Simple Tips to Help You Make Investing Less Scary

These effective tips for beginning investors will give you the confidence you need.

By Sandy Baker

Edited by Rachel Siegel

Updated Dec. 17, 2024

Does the thought of investing in stocks excite you? Do you wish you knew which investment strategy is best for you, but you’re just not too sure you want to make a decision?

It’s not uncommon for people to want to invest but not know where to start. The problem is, not making your move could be costing you money.

If you're expecting a tax refund or have some money sitting in a bank account, take action and try these simple moves to grow your wealth.

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Research before diving in

Yes, it can be risky to put your money into an investment, especially if there’s ample risk involved. But don’t stop there. There are lots of rewards, too.

The best way around this is to do some research. Find an investment strategy you’re comfortable with and educate yourself on how it works, the risks, and the opportunities. Education can alleviate your investor fear.

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Start small

You don’t have to dive in with all of the money you have in your savings account. Start smaller with an amount you're comfortable with, and then make consistent contributions over time.

Small sums of money can help you to grow your investment goals over time while working out that investor fear.

Ignore the scary news headlines

Yes, scary news can be worrisome, and it may seem like now is never the right time to invest. However, investing has a great deal of potential over the long term. I

If you’re looking for a quick profit, that’s harder to do, but if you’re in it for the long term, perhaps to help you retire early, those headlines are less important to you now.

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Secret: You don't need thousands of dollars to buy thousand-dollar stocks or create a diverse portfolio.

Robinhood offers a method of investing called “fractional shares.” On its own, one share of a single stock could cost a lot of money, making it difficult to diversify. Robinhood allows you to buy pieces of stock instead, so you have the option to build a diverse portfolio quickly.

Let’s say you want to invest $250, as an example.

With that amount, you could build a relatively diverse portfolio with an investment of $50 in a big tech stock, $50 in a retail stock, $50 in an energy stock, $50 in a manufacturing stock, and $50 in a bank.¹ This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice. To get stock reward, new customers need to sign up, get approved, and link their bank account. Stock rewards shares cannot be sold until 3 trading days after the reward is granted and the cash value of the stock rewards may not be withdrawn for 30 days after the reward is claimed. Stock rewards not claimed within 60 days may expire. See full terms and conditions at <a href="https://robinhood.com/us/en/support/articles/open-account-pick-your-stock/">rbnhd.co/freestock</a>. Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement. Robinhood Gold is offered through Robinhood Financial LLC and is a membership offering premium services available for a fee.

Even better news? Add a Robinhood Gold membership, and you’ll get access to 4.25% (as of 11/15/24) APY² Annual Percentage Yield. Rate valid as of April 12, 2024. To earn interest, a cash balance is needed. If you have a margin balance, there is no cash balance to earn interest. Interest rates for cash sweep and margin investing can change at any time. Fees may reduce interest earnings. on your uninvested cash³ Interest is earned on uninvested cash swept from your brokerage account to partner banks. Partner banks pay interest on your swept cash, minus any fees paid to Robinhood. As of Nov 15, 2023, the Annual Percentage Yield (APY) that you will receive is 1.5%, or 5% for Gold customers. The APY might change at any time at the partner banks' or Robinhood's discretion. Additionally, any fees Robinhood receives may vary and are subject to change. Neither Robinhood Financial LLC nor any of its affiliates are banks. All investments involve risk and loss of principal is possible. Robinhood Financial LLC (member SIPC), is a registered broker dealer. and the ability to buy and sell stocks 24 hours a day, 5 days a week.

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Keep an emergency fund

When you hit a rough patch or have unexpected expenses, having a backup strategy in an emergency fund can give you some peace of mind.

An emergency fund that covers your expenses over three to six months will help you to manage those down periods well.

Plus, having that money there can help you to know that you can take this opportunity to invest.

Set clear goals

Though it’s possible to do well quickly, it’s also important to create a long-term investment strategy. That in itself can seem scary, but it doesn’t have to be.

The key here is to create a few goals for the one-year, five-year, and 10-year mark that can help to give you something to work towards.

It also allows you to see your progress over time, which gives you the confidence you need to continue to invest.

So if you want to hit a certain amount of asset value in the next 10 years, set up a strategy to reach that goal at a pace that feels right for you.

Keep the long trend in mind

Instead of just focusing on the short-term gains and losses, focus on the long-term results and how they match your goals.

This strategy is valuable for many reasons, mostly because it can provide you with more financial stability, confidence, and peace of mind.

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Go with the simple approach

The more complicated your investment strategy is, the harder it will be to get behind it since there may be too many “what if” situations to overcome.

However, a simple approach can help you to build in some flexibility, making it easier for you to put aside the funds you need simply because you have a clear understanding of where those funds are going.

Just go for it

Investor fear is very real, and you shouldn’t think it’s unwarranted. Often, you simply need to go for it, though.

That is, put the money into what you’re considering and take a chance. Immersing yourself in the process allows you to get over that initial, difficult first step. It gets easier after that.

Start with a retirement account

A retirement account could be an excellent starting point because it offers more stability and less for you to “do” on a consistent basis. That means you can watch your investments grow or fall in value over time.

You’ll not only be contributing to a tax-advantaged strategy, but you can also learn more about the investment process and monitor changes over time.

That can give you some insight into how to make your additional investment decisions later.

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SoFi is a Member, FDIC. ⁷ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/terms">SoFi.com/banking/fdic/terms</a> See list of participating banks at <a href="http://sofi.com/banking/fdic/receivingbanks">SoFi.com/banking/fdic/receivingbanks</a>

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Don’t wait until things “get better”

Some people tell themselves they’ll invest when the market turns around. Yet, when markets are “better” they're also more expensive.

By investing when markets are “down,” you’re creating an opportunity for more growth. And investing steadily over time means that your returns will “average out” over the markets’ ups and downs.

In short, don’t wait until the market is thriving to want to start investing. Your money won't go as far.

Define your risk tolerance

Every investor has a risk tolerance or a level at which they feel there’s just too much risk involved. One way to get over investment fear is to recognize what’s okay for you and what’s not.

How much could you lose in the short term and still be okay financially? How long is it until retirement?

If you have more years ahead of you, you may be able to take on more risk because there’s more time to recover.

Educate yourself

One of the reasons you may be overwhelmed is that there are so many gurus and experts offering opinions that it’s hard to know what’s what. Perhaps you need to learn to tune out the “experts” and learn for yourself.

There's plenty of good information — not just opinion or marketing — out there and readily available. You can ask a financial advisor not just for investment advice, but also for investor advice that you can follow up with yourself.

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Avoid becoming obsessed

Pay attention to the market changes and how well your investments are doing. However, daily fluctuations are going to happen and they won’t all be good, so don’t become obsessed with the market.

Instead of looking at each day’s performance, focus on the long-term trends. That means you don’t want to watch your accounts every day or make decisions often because of short-term changes in market conditions.

Consider some tech tools

You can incorporate the use of tech tools, like trading simulators and online brokerage accounts, into your education strategy.

Remember that these are not proven to always be accurate, but they can offer a bit more insight for you to follow.

Hire a financial advisor

If you don’t have the time, patience, or confidence to make decisions right now, that’s okay. Find a professional to help you.

Don’t sit and watch the market change: act on it through the help of an experienced advisor that you’ve vetted and feel good working with.

Bottom line

You’ve heard it a million times: time is on your side. The sooner you start investing, the more your investments will be worth when you want to retire, send your kids to school, buy a home, etc.

Fear can cause you to procrastinate, and while some fear is healthy, you can get past most of it with these tips. And the sooner you get past it, the sooner you can start investing.

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