Julie Stav is the author of the best-selling book Get Your Share. I would hide under the sheets on a hot summer's night because I just couldn't stop looking at the shadows cast on my bedroom wall. When I couldn't take it any longer, I would call my mom. When the lights went out again, the shadows were still there, but I understood where they came from. I was no longer afraid.
Fear also plays a role in investing.
Most investors fear the risk of losing their initial investment due to the volatility of the market. But volatility, like the shadows on my wall, needs to be understood instead of feared. Once an investor understands how risk and volatility work, they can use it as a tool in evaluating any given investment. We all have a different tolerance for risk. What may be completely acceptable to you may feel uncomfortable to me and keep me from getting a good night's sleep.