A financial consultant at Fidelity, Ellen O'Connell, CFP® recently answered one of your money questions.
I've done a good job building up my family's savings, but my friend suggested I start investing some of that money. I get worried about the market ups and downs, though. What should I do?
You're not alone. In a recent Fidelity survey, we found that only 44% of women* were investing outside of their workplace retirement plan—and are missing out on building their nest eggs. We asked these women what was holding them back from investing and we heard a variety of answers:
- "I have no idea where to start."
- "I don't have enough money to invest."
- "The stock market is too risky."
- "I haven't gotten around to it."
I get it—with so many things to juggle every day, finances can take a back seat.
My clients tell me that they are comfortable investing in their workplace plan but when it comes to investing their nonretirement dollars, they get nervous about losing money in the market. So they end up keeping their savings in the bank with almost no growth. While they have eliminated the risk of losing money in the market, they have inadvertently taken on another risk—the risk of not keeping up with inflation (and losing purchasing power).
This is one of the reasons I like to lead with education; I try to make investing and financial planning clear and simple so you can feel more confident about the decisions you make. Let's look at a couple of common things that are holding people back from investing.
Worried about market ups and downs?
While market fluctuations are normal and may feel unnerving, the stock market has continued to show a positive long-term trend over the past 100+ years. Remember that when these moments of volatility arise, they are normal and it's important to be confident and comfortable with your investment strategy so that you maintain your plan and avoid emotional decision-making.
One of my core beliefs is that having a plan in place can help ensure that you're prepared for whatever road bumps you hit along the way. You may notice that political and economic events, even natural disasters, can sometimes trigger dramatic moves in the stock market over the short term. The key to long-term success is to stay the course. As the chart below indicates, experience shows it's better to take a deep breath, buckle up, and stick with your plan.
Think you need to know everything about investing before you get started and/or you don't have enough time and money?
I'm here to tell you investing doesn't have to take a lot of time. It's important to get familiar with key concepts and terminology but the best way to learn is to just get started. And remember, here at Fidelity you no longer have to have $5,000 to open a new account and start investing—some companies like Fidelity have removed all minimums on mutual fund accounts.
If you want to manage your own investments or just get more familiar with investing terminology, you can learn more about investing basics.
Ellen O'Connell is a financial consultant at Fidelity's Investor Center on Congress Street in Boston. Throughout her 20 years with Fidelity, Ellen has helped clients develop financial plans to achieve their individual goals and improve their financial wellbeing. Most recently, Ellen worked on the Women Investors squad, focusing on empowering women to become more engaged with their finances.
Ellen holds a bachelor of science in business administration from Merrimack College in North Andover, Massachusetts, and is a CERTIFIED FINANCIAL PLANNER®.
Next steps to consider
Call or visit to set up an appointment.
Set priorities, determine your goals, and build your financial plan.
How to tackle investing, money, and family matters.