3 Downsides to Investing in the Stock Market

I have come to terms with the fact that when it comes to the stock market I’m not an all-in kind of person. I know many people who have built their fortunes in the stock market and who have created financial independence at a young age because of their investments.

So while this post isn’t meant to discourage anyone from investing their money in stocks (I invest in index funds through my IRA and for my daughters’ college savings) I thought it’d be a good idea to look at some of the downsides of stock market investing.

# 1 – You Have Zero Control

The thing that bothers me most about investing in the stock market is the sheer lack of control that I have. While I do have control of where I choose to put my money I’m relying on a company, its management team and the economy for everything else.

It’s not like I can jump in and help a company if things go south. In this instance I would only have two choices: 1) sell the stocks and accept the loss or 2) cross my fingers and hope that things get better.

This is one major reason why I’ve been putting more money in my savings account to go toward alternative investments than I have been putting in my investment accounts.

# 2 – It’s a Slower Road to Wealth Building

Investing in the stock market can be a way to build wealth but it’s a long road getting there, especially if you’re not investing much money each month.

The typical “buy and hold” strategy is something that will take decades to pay off.

The returns I can get through other investments like real estate, my business or myself are much higher in comparison to what the market can bring me.

# 3 – There are No Guarantees

This reason is highly personal although I think many people can relate.

I come from a family where investing in the stock market is not the norm. My family have built their personal finances through small businesses and real estate and while there are no guarantees in these two things either, I do find that they can be more reliable than investing in the stock market.

It’s a Personal Choice

While I do have a little bit of money invested in the stock market each month I can’t bring myself to put larger chunks in those accounts. Instead, I’ve been saving my money and investing in areas that I’m comfortable with.

So, if you’re like me and just can’t seem to go all-in, it’s okay. There are plenty of other investment ideas that can help you grow your wealth.