5 Tips for Lowering Investment Stress and Simplifying

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Investing doesn’t have to be overwhelming, and here are some tips from some seasoned veterans on how to make investing simpler and ways to minimize stress throughout the process.

  1. Reducing worry amid downturns and inflation

Over the decades, the stock market has gone through countless crashes and corrections but has managed to recover from even the most severe circumstances. Expert investor Warren Buffett recommends having an outlook on the long-term. Even though the strongest stocks may take a downturn when the market dips, over time, they are likely to recover. Bottom line: Don’t spend energy worrying and ride it out.

  1. Skip stocks and other volatile assets, such as cryptocurrencies

No rule says your investment portfolio must include volatile assets such as stocks or cryptocurrencies. Steve Wozniak, the co-founder of Apple, doesn’t invest in them.

“As a rule, I don’t invest [often], because then you’ve got to be watching it every day, and I like my head to be really peaceful and low stress,” Wozniak told CNBC. As for cryptocurrencies, Wozniak says he’s “very skeptical” of most of them and considers them “too risky” for the average person.

  1. Consolidate into fewer accounts

Having numerous investments adds the stress of having to manage them all. For example, because the average person holds 12 jobs in their lifetime, some may have multiple 401(k) accounts. But no one needs these. Financial advisors recommend rolling over money from your old employer’s 401(k) funds into a new employer’s plan or an IRA. This also reduces the likelihood of losing track of an old account. With stocks and other investments, consider consolidation by moving them all under the roof of a single firm. Investment firms and financial advisors also typically lower management fees for larger accounts, as well as provide access to lower-cost mutual funds.

  1. Invest in a few quality stocks rather than a variety

Reduce stress by holding strong stocks from a few high-quality companies rather than holding a wide variety of stocks that chase the current movers and shakers. Warren Buffett encourages investing in businesses, not stocks. Strong businesses typically recover from market slumps. The focus is on long-term gains not quick ones.

  1. Split your investment savings into buckets

The “bucket plan” is splitting your savings into three different buckets – 3 different accounts – to make it easier to track your investment assets. Each savings account is a “bucket,” You use three to split your investment savings into short-term, intermediate, and long-term investment goals. This makes it much easier to gauge and compute how much you have to allocate to each investment goal. Remember, this is your investment money only – your personal savings goes into another account.