How do you mentally handle investing (e.g. analysis paralysis, stress, etc.)?

[bereanmom]

I’m currently 23 and realized I should have started investing in my ROTH IRA sooner than later. I just maxed it out. I plan on really just getting a handful of etfs just to keep it simple (VOO or VTI mainly, a bit in VTUS, and maybe a bit in something more volatile just because I have time on my side). That being said, I always get overwhelmed whenever I’m about to actually buy into those etfs, and then I don’t end up buying it because of it. How do you not get so overwhelmed?

My main thing is basically timing. I’ve heard people say that you should just invest because time in the market always beats timing the market. I see how that makes sense and I do intend to not do the whole trading and timing once I’m in. The thing is that I’m not technically “in” yet because I have nothing invested yet. I simply just funded my account.

I know I should probably just start investing, but I’m always somehow concerned about timing my entrance because “what if I enter at too high of a price and I don’t make as much in the long term because I couldn’t wait X amount of time when prices became lower.” Basically, it’s “what if prices fall in a couple of months so I can then buy more shares to hold long term.” It doesn’t help that some people say that the world will fall apart within the next 5 minutes while others say that this is the start to a boom (I’m exaggerating a bit here).

 

[saywhatnow]

@bereanmom You're 23. You'll see at least two to three gut-wrenching declines to your portfolio before you'll retire. Just accept that as fact and DCA whenever you have the cash. Just remember "DON'T PANIC," and you'll be alright

 

[greeneyes81]

@bereanmom I was about 30 when I figured out what a Roth IRA was and started investing in one.

When you have the money, invest into it preferably with index funds. I do VTSAX.

If I have the money I max January 1 of each year.

Also as mentioned, set up employer sponsored account

 

[ophni]

@bereanmom Realize the market is out of your control and that 8/10 years it goes up.

If someone offered for you to play a game where you win 80% of the time, wouldn't you play?

 

[utvolford]

@bereanmom Once you go through a major downturn and then see it recover, you kind of lose this anxiety.

I've lived through several now. In 2022 I was down 35%, over 100k. I didn't change much, just kept buying.

Those same shares were up 45% last year so I'm basically back to where I started and now in 2024 a bit higher even.

Just put the money in and tell yourself you aren't gonna sell it for 30 years. Forget about it. Don't look at it.

 

[leahratliff]

@bereanmom Your 23 you'll get used to it. Just buy it and didn't look at your account if that helps

 

[thegrungediva]

@bereanmom You're 23. Let me tell you the good news and the bad news.

The bad news is that you don't really have any money. Any money you invest will be (hopefully) tiny compared to whatever you're making in 10 years.

The good news is that you don't really have any money. If you have $10k and the market crashes 30%, well you only lost $3k. In the grand scheme of things, that's nothing.

You need to start investing ASAP. The worst case scenario is not that the market crashes. If it does, just tighten your belt and save/invest more during that period. If the market crashes, you better hustle make extra income and invest it ASAP.

The worst case scenario is the market never crashes. Because in that case, the rich just get richer, forever. Many retirees have millions in their investments. You're $10k is nothing compared to the rich. Homes will always appreciate faster than you can save. Things will accelerate faster than you can invest.

You should be praying for a crash.

 

[tmaxfield]

@bereanmom If your employer offers automatic payroll deduction this is the way. It takes the decision out of your hands.

 

[leejr]

@bereanmom You may be targeting a portfolio with too-high risk. Try to pick something that you will be comfortable with either going up or down.

Or invest a little bit to get started. 10% this week, 10% next week, and so on. But again, you'll need to be comfortable with the end result.

Write up an Investment Policy Statement for yourself. It will cover how you choose investment, how you should respond to losses, how much you need to save, stuff like that. Refer back to it when things get tough.

Take one week to consider over any new idea.

Turn on automatic purchases.

 

[fastze03]

@bereanmom Your having traders/investors psychology blockage. Solve it by learning and invest with more confidence. Pick up some basic chart skills . Also read traders traps has many traders psychology problems listed in there. Should help you. Goodluck.

 

[mosesson]

@bereanmom Long contemplative walks and good financial education, e.g. Rational Reminder podcast.