The Real Reasons Many People Miss Out on Years of Investment Growth

We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. Learn more.

Investing Investors Share Share Close Mail Page URL https://money.com/why-smart-people-wait-too-long-to-invest/ Link copied!

The Real Reasons Many People Miss Out on Years of Investment Growth By: Marc Guberti Marc Guberti Marc Guberti is a personal finance writer who hosts Breakthrough Success, a podcast where he teaches listeners how to grow their businesses and achieve personal transformations. Has also written: What No One Tells You About Rebalancing Your Portfolio What Investing Pros Know About Buying After a Sell-Off Warren Buffett’s Advice for Anyone Over 50 Warren Buffett's Lesson on How Much Cash You Should Really Keep in Retirement How Fear of Losing Money Keeps You From Getting Rich See full bio Published: Mar 8, 2026 4 min read Money is not a client of any investment adviser featured on this page. The information provided on this page is for educational purposes only and is not intended as investment advice. Money does not offer advisory services.

Getty Images Most people know that investing is good for their financial futures. Compound interest can help you grow your nest egg over time. But even people with a strong understanding of the financial markets and their benefits can be susceptible to "analysis paralysis" and the fear of making mistakes. Cognitive biases can act as barriers that prevent people from getting started with investing, and keep them on the sidelines for too long. Understanding those different biases, however, may help you overcome them. Can't Miss DealsCheck out Robinhood's online trading platform and get the first trade on themGet your first year of AARP for just $1574% off NordVPN right now — plus an Amazon gift card Bias 1: Analysis paralysis It’s natural to want to hunt for the perfect stock at the perfect price, but if you wait for those conditions to be met, you can miss out on a lot of investing opportunities. Instead, put a plan in place to regularly invest, which will take the emotions and overthinking out of the process. A simple way to do this is to automate investments into a low-cost index fund that mirrors a key benchmark like the S&P 500. That way, you buy more shares each month and gradually build your nest egg without having to log into your brokerage account.

Gold Investor Kit Offer: Sign up with American Hartford Gold today and get a free investor kit, plus receive up to $20,000 in free silver on qualifying purchases Bias 2: Loss aversion Loss aversion is a bias that highlights how the pain of a potential small loss outweighs the excitement of a potential gain. Your portfolio will likely see red days, but that’s a typical part of investing — not a reason to stay on the sidelines. Volatile market swings and news cycles can cause people to adjust their investing strategies and ignore fundamentals, which can cost them significant gains. You can use loss aversion to your advantage if you are on the sidelines. Instead of thinking about how much money you can lose in the stock market, think about how much money you will lose by keeping your cash in a bank account. Traditional checking and savings accounts are not built to keep up with inflation. Many investments can beat inflation and make it easier to retire on your terms. Shifting the loss aversion argument to reduced purchasing power and considering the opportunity cost of staying on the sidelines can cause smart investors to commit invest more money. Pet Protection: See How Spot Pet Insurance Can Help Your Dog or Cat Bias 3: The sunk cost fallacy (of time) The sunk cost fallacy causes people to continue with their current strategy if they have committed to it over a long period of time. This fallacy causes some investors to hold on to losing stocks for too long, even if the fundamentals get materially worse. This same fallacy also applies to people who are on the sidelines waiting for the next market dip. Some people believe a major headwind, such as inflation or tariffs, will lead to a market correction. However, amid all of that waiting, the S&P 500 may end up soaring. This scenario can cause an investor to feel like they made the wrong decision by staying on the sidelines, and they may wait for another market correction to take place. Investors can counter this concern with dollar-cost averaging, or investing sums of money at regular intervals. It’s typically better to invest money in the stock market each month than to try to time the market with a large lump sum. Save Smarter: Take control of your money with the Rocket Money budgeting app