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8 common hurdles to investing

Key takeaways

  • Fear of risk and a lack of knowledge, among other blockers, could be holding you back from potentially growing your money by investing.
  • Learning common investing vocabulary, carefully choosing from diversified investments, and working with a professional could motivate you to get started.

You may know intellectually that investing can help you grow your money and build wealth. Yet there are psychological barriers that may prevent you from making the first move with confidence. Here are common beliefs that may keep people from investing—or investing more—and ways to vault over those hurdles toward a potentially bigger bottom line.

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1. "It’s better to wait until I have more money to invest."

Inflation may have cooled from its post-pandemic highs, but some core expenses may still be eating up more of your income than they once did. Add on other priorities like paying debt or saving for a home, and you might not feel like you have ample cash to put into the market.

The truth: You don‘t need thousands, or even hundreds, extra per month to possibly benefit from investing. Even small amounts invested can add up and help create habits you can build on over time.

Make the leap: Look into high-impact ways to free up money, such as these ways to save thousands in a year, and learn more about balancing paying off debt, saving, and investing. Once your debt payments are on track and you’ve built up a cash buffer for emergencies, consider starting to invest in a workplace retirement plan, ideally enough to capture the full employer match, if you’re offered one. An employer match is like free money, and you can invest those contributions for potential growth.

2. "I’m already investing for retirement."

A workplace retirement account is a great place to start investing, but you may not want to stop there. Retirement accounts—including individual retirement accounts, or IRAs, that aren’t offered by your employer—generally come with contribution limits, as well as specific withdrawal rules. With workplace retirement accounts, your employer determines your investment choices.

Make the leap: You probably have long-term goals that aren’t just about having a comfortable retirement. Consider opening an investment account to fund those other priorities, such as a health savings account (HSA) if you’re eligible or a 529 plan for education expenses. If your employer doesn’t offer an HSA, you can still open one if you have an HSA-eligible high deductible health plan (HDHP). A brokerage account is another option without contribution limits and that offers a lot of flexibility.

3. "I’m worried about losing money."

It’s true that investing involves risk, including the risk of loss. It’s hard to see your portfolio’s value go down, especially if you’re naturally risk-averse. But opting not to invest at all means you won’t have an opportunity to gain anything. While it’s normal for the price of investments to go up and down, over time, the value of the market has risen (though past performance can’t guarantee future results). It might seem safer to hold onto cash in a savings account instead, but that puts you at risk of losing purchasing power to inflation. That’s because the interest you could make on that cash might not outpace rising costs. By contrast, the potential gains you could make by investing a portion of your portfolio in stocks could grow faster than inflation.

Make the leap: One risk-management approach to apply to your investments is called diversification. The idea behind it: If one investment declines, another might not—or at least not decline as much. Ensuring your portfolio is diversified across different asset types (such as stocks, bonds, and cash) and then diversifying within those asset classes (for example, diversifying across sectors of stocks) might help you sleep better at night while still giving your money a chance to grow.

4. "It feels safer to invest in tangibles, like real estate or gold."

Purchasing a stock may not feel as concrete as investments you can literally hold. While there’s nothing wrong with investing in tangibles, only investing that way can be risky because it’s not diversified and it may be harder to find a seller at the price you’re looking for when you need to offload it.

Make the leap: Consider adding to your tangible investments with stocks and other assets. If you’re interested in investing in real estate and gold without the storage and maintenance considerations, research gold funds and stocks and real estate investment trusts (REITs).

5. "I don’t have time to learn everything I need to know to feel confident about my investing choices."

With competing demands on your time and attention, you might not be able to become an investing expert. The good news is, there are a number of ways to learn to invest wisely without becoming one.

Make the leap: Think about whether working with a financial advisor who can guide you is the right approach for you. A financial advisor can help you create a plan for your financial goals and may offer access to investment management for a fee. If you’re investing in a workplace retirement plan like a 401(k) or 403(b), check if the plan administrator offers free or low-cost guidance on how to invest. A managed account could be another option, since professionals typically manage your investments, and they may also offer ongoing advice to help you stay on track with your finances. Robo advisors are a type of managed account that use varying degrees of digital engagement to help automate investing. Fidelity Go is our robo advisor that builds an investment strategy to meet your needs, and then rebalances your portfolio to help keep you on track toward meeting your goal. And once your account reaches $25,000, you’ll have access to a team of coaches who can talk through your finances with you.

Prefer a different route? Consider investments with built-in diversification that can do a lot of heavy lifting for you, such as mutual funds and exchange-traded funds (ETFs), which pool investors’ money to invest in a basket of securities. For example, an index fund is a type of mutual fund or ETF that aims to mimic the performance of a certain index, like the S&P 500® (), giving you exposure to many investments at once. A target-date fund is a type of mutual fund where the mix of stocks, bonds, and short-term investments gradually adjusts to balance the need for growth and stability over time as you get closer to when you need money for your goal (think: retirement or sending a child to college).

6. "I don’t know the exact right time to start."

Timing the market is difficult or even impossible. Rather than waiting for the best time to invest, it can often be a better idea to just get invested and stay invested.

Make the leap: Dollar-cost averaging is an investing strategy that can take the guesswork out of when to invest. This is when you invest a specific amount at regular intervals—like $250 a month or a set percentage from every paycheck—no matter what the market is doing. You’ll end up buying more shares when prices are relatively lower and fewer when prices are higher.

7. "I’m so far behind. It’s not worth it to start now."

If investing seems like a lost cause, you’re not going to be motivated to do it. It’s never too late to start working toward a better financial future for yourself and those who rely on you.

Make the leap: Now is better than later or never. As a hypothetical, if you contributed $7,000 a year to an IRA starting at age 25, you could have over $2 million by age 70. Wait until 35 to start making those same contributions, you could still amass over $1 million by age 70. Can’t start until 45? You could wind up with more than $500,000.1 The sooner you start, the more time your money still has to potentially grow. Not starting means not giving your money a chance to grow at all.

8. "It takes too long to see results."

Having to wait for gains might dampen any desire to try to get any. But investing is a long-term game, and like many good things, it can require patience.

Make the leap: Build in some incentives that can keep you ... well, invested in your investing journey. This could mean investing in dividend stocks, which entitle shareholders to part of the company’s profits and could offer a predictable cash flow. Note that it’s not guaranteed that companies pay a dividend. Or you might consider fixed income, like brokered CDs and bonds, which generally pay out a set interest rate, provided you follow certain rules.

Take the first step toward investing

To get started, open a brokerage account.

More to explore

1. This hypothetical example assumes the following (1) annual IRA contributions on January 1 of each year starting in 2024 for the age ranges shown, (2) maximum annual IRA contributions are $7,000 in all years beginning in the first year, (3) an additional $1,000 catch-up contribution for each year in which the investor is age 50 or older by December 31 of the year for which the contribution is made, (4) an annual rate of return of 7% and (5) no taxes on any earnings within the IRA. The ending values do not reflect taxes, fees or inflation. If they did, amounts would be lower. Earnings and pre-tax (deductible) contributions from Traditional IRAs are subject to taxes when withdrawn. Earnings distributed from Roth IRAs are income tax free provided certain requirements are met. IRA distributions before age 59 1/2 may also be subject to a 10% penalty. Systematic investing does not ensure a profit and does not protect against loss in a declining market. This example is for illustrative purposes only and does not represent the performance of any security. Consider your current and anticipated investment horizon when making an investment decision, as the illustration may not reflect this. The assumed rate of return used in this example is not guaranteed. Investments that have potential for a 7% annual rate of return also come with risk of loss. This hypothetical does not reflect the impact that minimum required distributions from a Traditional IRA could have if you turn 73 during the time period.

Investing involves risk, including risk of loss.

Past performance is no guarantee of future results.

Dollar cost averaging does not assure a profit or protect against a loss in declining markets. For a Periodic Investment Plan strategy to be effective, customers must continue to purchase shares both in market ups and downs.

Fidelity Go® provides discretionary investment management, and in certain circumstances, non-discretionary financial planning, for a fee. Advisory services offered by Fidelity Personal and Workplace Advisors LLC (FPWA), a registered investment adviser. Brokerage services provided by Fidelity Brokerage Services LLC (FBS), and custodial and related services provided by National Financial Services LLC (NFS), each a member NYSE and SIPC. FPWA, FBS and NFS are Fidelity Investments companies.

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