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What’s Stopping You From Value Investing Like A Pro?


Value investing is a proven way to build wealth. Studies show it outperforms other investment strategies like growth stocks, promising high returns over extended periods of time. Yet despite its intrinsic appeal, there might be something stopping you from trying it yourself. Your financial situation, fear, and inexperience may hold you back from investing like a pro.

Here’s why:

1. Debt.

Should you pay off debt or invest your cash? It’s a common question with a not-so-simple answer. It depends on a lot of factors specific to your unique situation.

If you have so much debt that most of your paycheck goes toward paying these bills, you might lack the funds you need to invest. It’s never a good idea to invest the money you need to pay off debt, even if you have a good feeling about the portfolio.

Remember, value investing is all about the long-haul. You’re getting in at the ground floor when stocks are cheap and waiting until they grow. This kind of investing doesn’t have the quick turnaround that could help you earn a quick buck to pay off personal loans before you get into hot water.

You may not have the capital for investing until you’ve paid off most of your debt, including line of credit loans, credit cards, and installment loans online. In this case, you should focus on what you can do to strike credit and installment loan debt from your budget before you start investing.

However, it is worth noting not all debt can hold you back from investing. Plenty of people invest while holding a mortgage, provided their budget lets them pay their financial obligations and invest at the same time.

Only you can tell if you’re financially prepared to make your first investment. Take the time to review your budget to see what feels right.

2. Fear.

Sometimes, it’s not the black and white of your bank account that’s holding you back, but a feeling of trepidation and intimidation. Being afraid to risk your hard-earned money is a significant barrier for a lot of people.

In many cases, it’s your fear of making the wrong call that’s holding you back. You’re wagering today’s hard-earned money on a play that may take decades to pay off. There’s a big chance that you make the wrong decision or trust the wrong source and wind up seeing your money disappear.

You’re also putting a lot of faith in the stock market, which has taken a beating over the past year. The experts know the market goes up and down, but it can be hard to see it happening to your money in real-time. That’s why they recommend thinking of it as a marathon rather than a sprint. Over time, the economy always grows.  

3. Inexperience.

Most people know investing is the key to growing wealth, but few people truly understand how investing works. It makes sense, after all. A lot goes into playing the stock market, and some of it may not be intuitive.

If you’re new to it all, you don’t have the know-how to make informed decisions about your investments. So rather than making the wrong decisions, you wind up never deciding at all.

Ultimately, this is a good thing. It shows you’re careful about your money and that you take investing seriously. You can easily pivot this strength in your favor. Research as much as you can about value investing, and read about what the pros do until you feel ready to make the leap.

Don’t Let Anything Stand in Your Way.

Don’t let debt, fear, or inexperience stop you from making smart investments. You can remove these barriers by working on your budget and getting informed. With extra cash and an understanding of the stock market, you won’t be afraid to give value investing a shot.