Please ensure Javascript is enabled for purposes of website accessibility

3 Common Excuses for Not Investing -- and How to Overcome Them

By Maurie Backman – Jun 26, 2020 at 7:02AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investing in stocks is a proven way to grow wealth. Here's how to get past the barriers that may be holding you back.

Investing isn't something that comes naturally to everyone, but it's also a good way for anyone to grow wealth. If you've yet to invest your money because you're stuck inside your own head, it's time to push past your fears and hesitations and start growing wealth. Here are three oft-used excuses for staying out of the stock market -- and why you really need to stop making them.

1. "I'm worried about stock market volatility."

Losing money in stocks is a very valid concern. You don't want to work hard only to hemorrhage cash when your investments tank. But if you play your cards right, that won't happen to you.

One of the best ways to avoid taking losses in an investment account is to only invest money you don't plan to use or need for at least seven years. If you don't put yourself in a position where you're reliant on that cash, you won't land in a scenario where you're forced to liquidate an investment that's down to cover bills or other expenses.

Man sitting at laptop with serious expression resting pen on face

Image source: Getty Images.

Another way to avoid losing money to stock market volatility is to adopt a buy and hold strategy -- meaning, buy quality stocks and hold them for decades. The stock market has a solid history of recovering from downturns, and if you take a long-term approach to investing, you'll be able to ride out crashes and come out ahead.

2. "I don't have enough money to invest."

It's easy to assume that you need thousands of dollars to get started with investing, but in reality, $100 or so will do for starters. In fact, these days, you can buy stocks with share prices that may seem out of your reach, thanks to the increasing availability of fractional shares.

Fractional shares let you buy a portion of a share of stock rather than an entire share. That way, if you only have $200 to invest but you're interested in a stock like Amazon (AMZN -1.57%) that's currently trading for well over $2,000 a share, you can still get a piece of that company.

3. "I don't know how to research investments."

It's a bad idea to buy stocks without understanding how the companies behind them make money and what their finances look like. But if you don't want to put in the legwork to research individual companies, you can still get in on the stock market by focusing on index funds.

Index funds track existing market indexes in an attempt to match their performance. As such, if you buy an S&P 500 index fund, you'll be investing in a bucket of the 500 largest companies by market capitalization. And since that's a nice diverse mix right there, you could load up on some index funds and call it a day rather than spin your wheels trying to understand what P/E ratios mean (though educating yourself on stocks certainly isn't a bad idea if you have the time and appetite for it).

Buying stocks is a great way to turn a small amount of money into a large sum over time. If you've been using the above excuses to stay away from stocks, it's time to break that cycle and get in the game. If you don't, you may sorely regret that decision down the line.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Maurie Backman owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned, Inc. Stock Quote, Inc.
$113.00 (-1.57%) $-1.80

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.