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You are not cowards if you are keeping some money out of stock

If you’re a little scared to invest your money right now, you’re not alone. I have received many emails and comments recently from people who have money to invest. They also know how to invest. But they simply fail to put money into the stock market.

Why are they afraid? Many of them cite the fact that the markets are high at the top and the infinite flow of uncertainty in the news.

You are not cowards if you are keeping some money out of stock

Do you feel yourself? Well guess what: you do not have to invest the money. Really, it is true!

Funny, but even as I write these words, I feel a sense of relief. I gave this same advice once again when I noticed how much I was worried about my investments.

You see, I hate losing money in investments that are outside my control. It binds me in knots and distracts me from almost everything. So a little while ago, when I moved some money from a 401 (k) plane to my retirement account after a job change, I left it in cash.

I was told I was well off to lose if the market continued to rise. But I was not good at investing this pile of money just in time to make my head die in a big, scary drop in the market. And guess what? That was and still is true. So, I’m fine sitting down in cash earning 0.16 percent or whatever the rate might be. I do not just want to lose.

This decision has cost me the paper gains I could get, given how much the stock market did since the decision, but I do not care. I do not see it as a real cost. Instead, I see it as an investment in my health and human capital.

The fact that I did not have to worry about losing money in that area of my life allowed me to feel comfortable taking risks in other areas. I started two or three new businesses and moved my family to New Zealand. The risks I have taken have provided and will continue to offer a much higher return than I could have if I were fully invested in the markets.

I know what you’re thinking, but this is not a disadvantageous way to engage in market times, where you are very confident about what the markets will do next and will invest (or not) accordingly. On the contrary, it is to take less comfort (and live with less potential reward) in one area, taking more risk in another. Having a bunch of low-risk investments offers a reactive to an otherwise risky life.

Of course, every individual has to take a full look and look at the overall financial picture. You have to evaluate when and where you take risks. But along the way, do not be afraid to do the moves that make it easier to take risks that do not fit into a spreadsheet.

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