I’ve been having a lot of conversations lately with people who are hesitant or don’t know how to invest. I always try to keep it simple, but there are so many different aspects and facets to each situation that make investing difficult or scary.
I know that some of my initial hesitation around investing was lack of knowledge. There is so much to learn if you want to do different things in investing. However, for the basics – such as index fund investing – it doesn’t take any special skills or knowledge to get started.
When talking about the basics, I usually refer to my College Student’s Guide to Investing, as it has a lot of helpful hints for new investors. However, I know that this guide doesn’t address everything.
So, readers, why are you hesitant to invest? I would love to hear your responses and compile any common themes!
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This post was written by...
Robert – who has written 317 posts on The College Investor.
Robert is the founder and editor of The College Investor, a personal finance site dedicated to young adult and college student finances. You can learn more about him here and connect with him on Twitter or Facebook.
{ 15 comments… read them below or add one }
I love investing, but I’ve been hesitant to invest in stocks/mutual funds the last couple of years. It seems like things have been so up and down, that it feels safer to hoard the cash. Dumber probably, but it feels nice. lol.
You’ve probably done alright as well – safety is important!
People are afraid of the unknown! Why aren’t people buying houses with prices and interest rates so low. It is fear of the unknown!
I agree – the unknown can be a huge issue!
I agree. The unknown can be scary. I too like knowing what is going to happen. However I try not to let that run my investment strategy; at least not fully.
I started investing when I was 19 years old, so I got a pretty early start. However, the thing that I think keeps most people out of investing is because they are overwhelmed with all of the options. If only they taught a course in college or high school that showed students how easy it is to invest in index funds, or even lifecycle funds! Simply buy one fund and let it sit!
There is so little financial education in America! It’s such a shame!
Sorry for the second comment, but I didn’t subscribe to replies in my previous one.
I bet the 600 point drop on the DOW would spook investors. I know a friend who removed the all his 401K money in stocks that same day. Crazy!
People stop investing when the going gets tough (the current market for example), yet statistics shows this is exactly when you should be investing for maximum gains!
Easier said than done though!
Very true! When the market goes down BUY! Don’t sell!
I am not, but I used to be. I think it was because I didn’t have enough in emergency savings or savings in general, so it felt like I had the risk of losing “everything”. Also, I think people who are afraid may have a shorter time horizon.
Risk tolerance can be an important deciding factor.
Volatility. The stock market roller coaster is going up and down too much for a new investor to handle.
Hi Robert,
Personally, the reason for my hesitation is because of lack of extra funds and lack of knowledge. I wouldn’t know where to start. If I do decide to invest, I would prefer having a mentor to guide me.
I’m not familiar with index funds but thanks for sharing. I want to know more about it so I’ll be doing a bit of research.
Have a nice day!