Afraid to invest: the two fears, and how to choose between them

On a Tuesday morning, one line was waiting under the insights bell: your "Emergency fund" goal had reached its target. You smiled. After months of deposits, the bar was full. Then, within seconds, the smile turned into a question: "Now what?"

Because since then, there has been something left over every month. It sits in the current account, and every time the thought "maybe we should invest it" comes up, a picture comes with it. A red number, a falling line, and you explaining to yourselves why you didn't wait. So you put it off, and say, almost with relief, "We're just not investing people."

Two familiar answers are waiting. The first: wait for the fear to go away by itself, one day, once you understand enough. The second: jump in all at once after a chat with a friend who sounded sure, then run at the first drop. Both are familiar, and both bring you back to the same place.

Part of you wants the money to work for the family, for that surplus to have a job. Part of you never wants to feel foolish in front of a loss. Both are worth listening to. As long as nothing is decided, you keep something precious: "we've never been wrong." That isn't cowardice. It is protecting something real.

Fear of losing money, and a fear with no name

"An investing type" is not a trait you are born with. What you are feeling is two fears working together, and both make sense.

The first is familiar: the fear of losing. Daniel Kahneman and Amos Tversky showed in 1979, in their prospect theory paper in Econometrica, that a loss hurts people more than a gain of the same size pleases them. That isn't a flaw in you. It is how the mind weighs things.

The second is quieter, which is why it is hard to see: the fear of looking back in ten years and finding you never decided. It sounds faint because of another mechanism. Ilana Ritov and Jonathan Baron described omission bias in 1990, in the Journal of Behavioral Decision Making: people prefer harm that comes from not acting over smaller harm that comes from acting. So "doing nothing" feels safe, even though it is itself a decision.

It isn't that you're not suited to this. It's that only one fear was invited to the meeting. The other waited outside, because not acting doesn't feel like choosing.

Investing with no experience: the sheet before the decision

This week's goal involves buying nothing. One sheet with both fears on it, and knowing what is already invested in your names in pension and in a keren hishtalmut (קרן השתלמות), a tax-advantaged savings fund. Without pretending you aren't afraid, without jumping, and without waiting for the fear to leave.

What people describe after writing both fears down is that the decision turns from a wall into a question they can weigh. What the answer is, is your decision.

When you feel ready to invest: from the sheet to the question of the instrument

Stage 1: both fears on one sheet

Two columns: "what scares us about investing" and "what scares us about not deciding". Three lines in each, in your own words, without correcting yourselves or arguing back. If you are a couple, each writes alone, then you compare.

Which fear is louder for you today?

When you think of the surplus sitting in your account, which sentence fits best?

Pick the answer closest to yours. There is no wrong one.

We see a red number and ourselves regretting itWe see ourselves ten years from now, still waitingBoth, equallyNeither, we simply have no time for this

Stage 2: the emergency fund stays separate

Money for the coming months doesn't enter this question at all. The goal that reached 100% stays a separate goal with its own name, so that even if you invest one day, the next car repair won't wait on the market. Its size and where people keep it are covered in the emergency fund guide.

In AlphaHome: the "Emergency fund" goal stays where it is, with its amount and date, and the insights bell lets you know when a goal is reached. That is exactly the moment the "now what" question tends to arrive, and a good moment to open the sheet.

Stage 3: find out what is already invested

Here is something that changes the picture: if you have a pension fund or a keren hishtalmut, you already invest. The money there sits in an investment track, part of it in the capital market, and has for years, even if you never pressed a "buy" button. The fear of investing meets a surprising fact: you have already lived through ups and downs in those accounts without noticing.

The step: open the annual statement of one account and read the balance and the name of the track. If there are old accounts you have lost track of, Har HaKesef (הר הכסף), the Capital Market Authority's search service, helps find them. To compare fees and returns between tracks, the Authority's public tools are Gemel-Net and Pension-Net.

Choosing a track, transferring, or withdrawing from a pension fund, kupat gemel or keren hishtalmut is a personal decision, and this article only describes how the instruments work. By law, pension advice requires a pension adviser's licence. A licensed pension adviser can look at your case.

In AlphaHome: on the pension page you type in each long-term account's balance and fees from its statement, and see the household's total in one place. The page doesn't recommend anything or project a figure. It shows how much is already invested in your names.

Stage 4: learn one instrument all the way through

Before any purchase, a question of understanding. Pick one type of instrument, an index fund or a kupat gemel lehashkaa (קופת גמל להשקעה) for example, and learn it until you can explain it to your partner in five minutes:

Before buying, understanding

• What the money is actually invested in
• What it costs a year: management fees, buying and selling commissions
• How it is taxed, and when
• How long it takes to get the money out if needed
• What we do on a day it falls, written in advance

0 of 5 done

A good starting point for the basics is the beginner's guide to investing, alongside the guides library.

Stage 5: only now, the question of the instrument

What people describe when they start small is an amount they could watch fall without losing sleep, one the first fear on the sheet is able to carry. Whether, when and in what to invest is your decision.

When the fear comes back halfway

"We started, it dropped, and we panicked." What you are hearing now is the first fear, the one already on your sheet. It isn't a surprise; it is an expected guest. Today: read the sheet before doing anything. What people in this situation describe is not selling on the day of the panic, and coming back to the question a week later; the decision is yours. Next time: next to the first fear, one sentence about what you do on a down day, written on a calm one.

"We're still not ready." Not wanting to make a mistake is doing its job here, and that is legitimate. "Not ready" can be a good answer, as long as it is a decision and not a default. Today: a step of understanding, not of buying, such as one more line from the Stage 4 list. Next time: a date in the calendar, three months out, to come back to the sheet.

A friend says how much they made, and suddenly everything feels urgent. That urgency isn't information about the market. It's the feeling of comparison, and you are allowed to feel it. Today: add it to the sheet, as a line in the "not deciding" column. Next time: no decisions on the day of a conversation like that.

Afraid, and deciding anyway

Waiting for the fear to disappear lets one fear decide for both. Writing both fears side by side means you decide, even if the decision is to wait longer. You are not "not investing people". You are people who know what they are afraid of. We are afraid, and we decide anyway, with our eyes open.

This week: a sheet with two columns, "what scares us about investing" and "what scares us about not deciding", three lines in each. And one more thing: type the balance of one long-term account into the pension page in AlphaHome.