Canada Markets close in 4 hrs 46 mins

Scared of Losing Money Investing? 3 Ways to Soothe Your Fears

Christopher Liew, CFA
A person suffering

Saving precedes investing, although the latter is the only route to attain your long-term financial goals and not the former. You go into investing to multiply your money and be secure financially in your later years.

Losing money, however, is scary; investing can become mental stress. You can overcome fear and be stress-free by adopting three helpful tips.

Understand your investment prospect

Learn about bonds, stocks, mutual funds, and other methods before parting ways with your money. Of all the investment options available, stocks offer the highest returns over the long term.

When investing in the stock market, don’t invest in companies whose business you don’t know or much less understand. Once you’ve done your due diligence, you can invest with confidence.

Banks like Toronto-Dominion Bank are not complicated prospects. Banking operations are not as intricate as the operations in the energy or technology sectors. TD is known all over North America as the bedrock of stability.

Besides, paying dividends is a 162-year-old tradition at TD. It’s phenomenal. You can grow your capital significantly over the long term with its 3.85% yield. The bank also raises its dividend once a year. TD has proven its resiliency to endure the severest financial crisis in history.

Don’t be tempted by high rewards

Another way to combat your fear of losing money is to contain your greed and avoid tempting offers. Keep in mind that the higher the reward, the higher is the risk. Protect your capital by investing in low-risk business models.

Suncor is the fountain of wealth for risk-averse investors. The company is the second-largest energy company in Canada with 17 consecutive years of annual dividend increases. This energy stock is also one of only two stocks Warren Buffett is exposed to in the oil industry.

The billionaire’s investing strategy is successful because of value stocks. Among all energy companies, Suncor is a value stock with the most significant upside potential. It has yet to achieve its full potential, despite operating for 66 years.

Suncor stands out as a viable investment, because its operations encompass the entire value chain of the oil and gas integrated industry. The company owns the pipelines where the products are transported. Its refineries are also counter-cyclical, so it can counter the volatility of oil prices.

Commit to your long-term objectives

Patience is also a virtue in the investing world. If you have TD and Suncor in your portfolio, be patient. Don’t be distracted by the higher-yielding dividend stocks. The excellent track records of the banking giant and energy forerunner speak for themselves.

With the two high-quality stocks averaging a 3.9% dividend yield, you’ll receive stable income as you sail towards your retirement goals. You don’t even have to sell the stocks at any point during your journey.

Earning opportunities

The fear of losing money is sometimes an excuse for not investing. Idle money, however, brings no long-term benefits. Let your money work and grow through low-risk stocks like TD and Suncor. You’re not taking a scary leap, as both can survive a volatile market.

More reading

Fool contributor Christopher Liew has no position in any of the stocks mentioned.

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Motley Fool Canada 2019