The GDP dipped in July, sparking recession fears and scaring many Americans about their financial futures. That fear may even lead some to avoid investing altogether, or to panic and sell current stocks.
But it shouldn't.
For first-time investors who may be afraid of the current market, the "Wolfette of Wall Street" Lauren Simmons shares some advice to try: Ignore how you feel.
"Warren Buffett says never invest with emotions," the 28-year-old tells CNBC Make It. "So if you're investing out of fear or really excited and you're chasing something: No."
Buffett, investing legend and CEO of Berkshire Hathaway, doesn't allow current events or the news to affect his investment decision making, he said on CNBC's "Squawk Box" in 2018. No matter what happens, "we will buy the same stocks today that we were buying last week," he said.
That's because changing your investments based on emotion goes against investing for the long-term. Instead, once you find a company worth investing in, stick with it. "If you aren't willing to own a stock for 10 years, don't even think about owning it for 10 minutes," Buffett said in his 1996 shareholders letter.
Simmons agrees. "Long-term investing always perseveres," she says. "We do not need to be watching the stock market on a day-to-day basis. It's like watching paint dry, and it will give you a heart attack."
It's also important to learn as much as you can before investing, says Simmons, who became the youngest full-time woman trader on Wall Street at 22 and is on track to earn $1 million this year.
"You're not going to miss some opportunity if you don't invest today," she says. "Really take the time to invest." Simmons herself took two years to figure out what kind of investor she wanted to be.
Simmons emphasizes the importance of understanding your risk tolerance as well. If you have a high risk tolerance, you may be OK investing in speculative assets like crypto, Simmons explains, while a more conservative investor may stick to putting money in savings accounts, despite the low interest rates.
Most investors will fall somewhere in between, investing in a mix of bonds and equities, based on their individual goals.
Of course, if you are not in a good financial situation to invest, wait. If you don't have savings or have continuous debt, "please do not invest your money," Simmons says. "Just take [your] time. Educate, educate, educate — and then invest."
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