When it comes to starting your investment journey, it is very easy to feel overwhelmed and lack the motivation to invest.
Investment concepts can be difficult to grasp, technical jargons can be hard to understand and the fear of losing money is always at the back of your mind. These are the types of challenges that newbie investors will need to navigate, even before putting their first dollar into an actual investment.
And while it’s good to be aware that the investing world can be a complex environment, it becomes counter-productive if these challenges paralyse you from getting started.
One way to overcome your inhibitions is simply to think of it as part of leading a healthy lifestyle. You don’t need to be a dietician to eat healthy or an Olympic weight lifter to hit the gym. Once you think about it in this manner, you’ll realise you don’t need to be a “Warren Buffet” to start investing for your future.
Here are a few simple ways in which investing for your future can be similar to living a healthy life.
Ever noticed how successful workout plans almost always start off with small attainable milestones?
The reason for this is simple. By starting small, you are able to focus your attention on attainable goals, without having to worry about your lack of knowledge, training or experience in the beginning.
For example, if it has been a while since your last run, you will probably prefer to complete a weekly 2.4km run, rather than start off with a 10km run.
This isn’t to say that running 10km is an unattainable goal. It’s absolutely not. Rather, the point here is that it’s easier for you to take baby steps and achieve your goals, by starting small. By reaching these goals, it will give you the drive and motivation to continue vs. aiming for a difficult goal where you might be worried about o keeping up with the intensity of what’s needed to accomplish the difficult goal.
The same logic applies to investing . It is going to be difficult for anyone who has never invested before to suddenly go all-in on a single stock. A more measured approach would be to start investing a small sum each month, say $100 or $200, into unit trusts via investing platforms such as Aviva’s Navigator.
Use a strategy that makes sense (to you)
Anyone who has ever tried dieting would know that there are plenty of diet plans which you can choose from. There is the Atkins diet, the paleo diet, the ketogenic diet and many more.
Constantly jumping from one diet plan to another wouldn’t be a good idea if you want to see results. Instead of fretting over what’s the best plan and randomly changing to a different one, choose one that makes sense to you, stick to it for a while, and observe the results that you get. You can then choose to tweak this plan based on your needs and decide if it is suitable for you.
In the same way, the investing world is filled with different investment concepts and advice. You have value investing, growth investing, dividend investing, fundamental analysis, technical analysis as well as many other strategies you can choose from.
If you’re just starting out, choose one that makes the most sense to you. This should be a strategy that you understand and can relate to. This is better than constantly hopping from one strategy to another, just because you see the people around you doing things differently.
Discipline is the key
Whether it’s a fitness plan or a diet that you are starting out on, you need to have the discipline to stick to your plan. There isn’t much point in spending a lot of time researching and understanding the best plan, only for you to drop it a month later because you didn’t have the mental fortitude to continue with it.
The same discipline is required when it comes to investing. When you first start out, it’s easy to find the motivation to save and invest as much as you can each month. However, you will only find success if you are able to have the discipline to stick to your plan over time.
Focus on long-term goals
You want a fit and healthy body for life, and not just for a few short months.
In order to achieve this, you should focus on your long-term goals, rather than to worry about short-term results. For example, there is no point in having a trim, fit body for that beach holiday that you are going to in a few months, only to revert back to an unhealthy lifestyle after the holiday. Such short-term gains are not only a waste of your efforts, but could even be detrimental to your long-term health.
Similarly, you should see your investing journey as a marathon and not a sprint. While it’s attractive to enjoy short-term gains in your investment, it’s more important to consider if these strategies, which has led to short-term gains, are actually going to be sustainable in the long-run. If the answer is no, then you may wish to review your strategies.
At the end of the day, if you are investing for your future, be it an early retirement or some other important goals, you need to ensure that you have the right strategies which are going to help you achieve your goals based on your timeline.
Ready to kick-start your investment journey? Aviva’s Navigator offers more than 900 unit trusts to customise your portfolio and free switching of unit trusts in wrap accounts. Get in touch with your preferred financial adviser representative to find out more. Alternatively, you may leave down your details in the form below and we'll be in touch.