Investing in the Stock Market: Four Reasons to Get Started

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We've got four solid reasons to stop avoiding the stock market.

Our lives are filled with regrets, from fashion faux pas to missed social events. But when it comes to finances, one regret stands out for many women: not investing enough.

Over 40% of women surveyed by Merrill Lynch expressed a desire to have invested more. Men tend to invest more frequently, making it tougher for women to meet their long-term financial goals.

While safer options like bonds and savings accounts can reduce risk, they often lack the growth potential of stock market investments. To preserve the value of your money over time, stocks are essential. “Stocks provide a significant growth opportunity in a portfolio,” states Renee Hanson, a private wealth adviser.

Yet, many women come up with reasons to avoid investing. Let’s explore a few common excuses and why you should still consider investing.

Excuse #1: I'm afraid of losing money

Reason to invest anyway: Only invest money you won’t need in the short term. Despite its ups and downs, the stock market has never lost value over a decade. Investing for the long term allows your money to weather volatility.

Keep your emergency funds separate from investments.

“If you’re planning on buying a home, don’t invest your down payment six months in advance,” advises Stefanie Lewis, regional wealth planning manager. “Invest only what you can afford to commit long-term.”

Excuse #2: I don't know how to choose stocks

Reason to invest anyway: You don’t need to pick stocks. By choosing mutual or index funds, you can invest in a range of stocks collectively, which reduces risk.

Investing through funds creates a diversified portfolio, minimizing the impact if one stock underperforms.

Excuse #3: I don't have enough to invest

Reason to invest anyway: You can start with a small amount. Utilize your workplace 401(k) or a discount brokerage that requires low initial investments. Regular contributions, even small ones, can lead to substantial savings over time due to compound interest.

Investing modestly helps build confidence to invest larger amounts later, notes Lynn Ballou, a Certified Financial Planner.

“It’s similar to dieting,” she explains. “If I can resist a cookie today, that’s progress. Start small, and as you see gains, you’ll be motivated to invest more.”

Excuse #4: Investing seems too complicated

Reason to invest anyway: It’s simpler than you think. After selecting your fund, you can set up automatic deposits to regularly add money without much hassle. Just check in occasionally to ensure your asset allocation aligns with your goals.

You've got this!

Don’t sit on the sidelines. We’re all in this together! Join the private group of goal-oriented individuals today to discuss everything.