Article Title: Conquering Your Financial Fears
Author: Robert Valentine
Category: Personal Finance, Investing, Stock Market Investing
Word Count: 468
Keywords: Financial Fears, Stock Crash, Identity Theft, Money, Investing,
Market, Conquering, Worry
Author's Email Address: news@themoneyalert.com
Article Source: http://www.articlemarketer.com
An unusually helpful bit of pop psychology holds that we should worry only about
things we can control or effect and put aside anxieties we cannot. That advice
holds true for worrying about money and investing.
A 2005 Money Magazine poll asked readers about their financial fears. Many of
those topping the list cannot be controlled by the individual or have little
likelihood of happening. Addressing a related fear that can be controlled may
help alleviate some of the anxiety.
Fear: Stock Market Crash
Almost half the respondents in the Money survey said they were concerned about a
potential stock market plunge. While visions of the Nasdaq tech crash still
haunt some of us, the reality is, your biggest worry should be getting mediocre
returns from your investments. People often abandon the buy-low, sell-high
principle when they need it most. Good markets make many investors feel
invincible so they don't sell or rebalance. When markets decrease and prices are
low, investors get scared that they will lose out on potential gains. They jump
ship figuring a small return is better than none but ignoring the potential
upside if the stock price rises again.
Diversification and dollar-cost averaging may help you avoid mediocre returns.
By making sure your portfolio is invested for the long haul across a variety of
markets, countries and investment vehicles, you may reduce your risk exposure
and potentially open yourself up to more than mediocre returns.
Fear: Identity Theft
Americans have a great deal of fear of identity theft and for good reason. It
can wreck havoc on your personal finances. Mistakes on your credit report,
however, are far more likely and can severely damage credit ratings.
In 2003, the Federal Reserve selected 250,000 credit reports and found that 70%
of them contained mistakes of some sort. Those mistakes can range from minor to
inaccurate or false delinquencies that can ruin your credit. Be cautious about
giving out your Social Security number and check your credit report once a year
for inaccuracies.
Fear: A Failing Economy
High energy prices, terrorism and natural disasters are all enough to make
Chicken Little look rational. With our penchant to view the future as a
continuation of the past, it's no surprise that many Americans fear another
1920s-style depression or worse.
By investing in a wide-variety of investment vehicles, you can help increase the
chances that if one major world economy starts to sputter, you're gaining in
another one that is booming. For those in retirement, where income distribution
is so important, having a strategy that generates income in good times and bad
is critical.
Many of us fear the worse on a consistent basis, and we all face risks every
day. The real task is rooting out which financial fears can be controlled and
then working with your financial professional to minimize your risk.
Robert Valentine is a well-known expert in the matters concerning investors.
His articles on financial planning matters that concern investors have been
published by several publications throughout the United States. Please
visit his website, http://www.themoneyalert.com
to view his column.
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