Don’t Be Overwhelmed by Investing

July 27, 2015

Many of us feel overwhelmed by investing, partly because there are myths about how difficult it is to invest and partly because we don’t understand all the technical terms and concepts we read about or hear financial professionals use. However, investing doesn’t have to be hard, and you don’t have to be overwhelmed. Here are a few strategies to help you avoid feeling overwhelmed by investing:

Dollar Cost Averaging

One of the best ways to stop feeling overwhelmed by investing is to make use of dollar cost averaging. This is a strategy that involves taking smaller amounts of money and consistently investing. One of the reasons it’s so easy to feel overwhelmed by investing is due to the myth that you need to have a large chunk of capital to invest.

Many people think they need to have $10,000 or more to invest effectively. However, investing is easier than that. If you have as little as $100 to invest, you can build a portfolio with a site like Betterment. Many other discount brokerages will allow you to set up automatic investing with as little as $50 a month. Acorns, a new investing platform, will let you get started with as little as $5, and you can invest pocket change if that’s all you have.

While you want to eventually increase the amount that you set aside each month, the reality is that you don’t need to wait until you have a lot of money to invest — and you shouldn’t wait. Use dollar cost averaging to get in the habit of investing consistently, and you can build up your portfolio over time, without it being too difficult.

Index Mutual Funds and ETFs

One of the hard things about investing is overcoming analysis paralysis. It’s easy to feel overwhelmed when there is so much information coming your way. The good news, though, is that you don’t need to fall victim to analysis paralysis.

Instead of worrying about stock picking, which requires you to learn a lot of information, as well as setting you up for problems if you pick the “wrong” stocks, consider indexing. Using index mutual funds and ETFs can help you reduce the amount of information you need to absorb. It’s a good way to get beyond analysis paralysis.

If you really want to avoid analysis paralysis in your investing, consider investing in an all-market fund. These funds offer exposure to all the publicly traded securities on indexes. This can give you broad exposure to the market, and reduce the number of decisions you need to make about your investments. When combined with dollar cost averaging, indexing is a powerful way to start investing and build wealth without becoming overwhelmed.

Eventually, you might want to branch out in your investing, but you can learn what you need to learn while you build wealth with the help of an automatic investment plan that involves an index mutual fund or ETF. You’ll have low fees and, as long as you focus on the long term (and remember that over the course of 25 years the stock market as whole hasn’t yet lost), you can get beyond the feelings of being overwhelmed by analysis paralysis.

Invest for the Long Term

Finally, it’s important to remember to invest for the long term. When you look at short term volatility in the markets, it’s easy to become overwhelmed at the thought of investing. However, in the long term, you are likely to come out ahead, especially if you have a consistent investing strategy that is based on asset allocation and dollar cost averaging. The trend line tends to straighten out over time when you look at investing performance. Consider your investing plan as it applies over a course of two or three decades, and you will find more peace of mind.


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Miranda writes about personal finance almost every day. An experienced freelance writer, she's covered your money online and in print from every angle and is always looking for new ones.

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2 Responses to Don’t Be Overwhelmed by Investing

  • Grace @ Investment Tips for Beginners

    Hi Ben, thank you for all the personal finance tips you have shared.

    Investing is a great way to achieve financial freedom fast. Can you say something about asset allocation strategies Ben?

    Thank you.

  • Zee Hamdani

    Totally agree with you on the dollar cost averaging point. As long as you have some money saved aside for emergencies, the rest should be put to good use in the form of investments. Idle money, sitting around, only loses it’s purchasing power and nothing else. If you don’t want to aim for higher returns, that is fine as well, as long as you are battling out the rate of inflation so that you can avoid losing any purchasing power on your money.