The war in Ukraine, high inflation and fears of increasing interest rates are causing stock prices to fall. Have you just started investing? Then it's almost inevitable that your investment will be worth less. That's not fun, and even quite stressful. What is the best thing to do now?

Whereas many Dutch people previously found it too exciting to invest their money, more and more of them are now getting into investing. In the past year alone, the number of investing households increased by 12% to 1.9 million. The main reason? Simple: more returns.

Trend and Interest

But returns could also be gained (or lost, more on that later) with investing before. Why did so many people started just recently? The novice investor needed a little push, and that is the trend that investing has become.

Information about shares, cryptos, index funds: the media, bloggers, advertisements and finfluencers have been bombarding you with these things for the past two years or so. And the more often we come into contact with something, the more we get used to it. As a result, more and more people think: hmm, maybe I should start investing too, if half the world is doing it.

Another factor that helped were the low interest rates, which have now risen slightly. If central banks keep interest rates low, it means that stocks become relatively more attractive to invest in than bonds. And so investors stormed the stock markets in large numbers.

A dip

Only the stock exchanges did not rise, but fell during the past period. There are several reasons for this. The corona crisis caused unrest on the stock market, and the war in Ukraine is doing the same now. And investors don't like turmoil.

In addition, inflation has not been as high as it is now for decades, so there is a good chance that central banks will raise interest rates further. A rising interest rate can make people prefer to put money in their savings account, or buy bonds. In this way they benefit from higher interest rates. And if people start saving more, they will spend less. That's not good news for company profits and therefore also for shares.

A little scary

All of this means that you, as a novice investor, have probably seen some of your deposit evaporate. That's shitty, of course, and you might also find it a little scary. After all, many novice investors check the state of their money every day. And seeing that minus again and again does not make you happy.

So what is the best thing to do? Before we discuss the options, first this: know that you can only speak of loss when you sell your investments for less money than you bought them for. Until then, the value of your investments can go either way.

Head in the sand

If you do not need your invested money in the short term, and you can wait for better times in investment land, then it is smart to just keep on investing. Continue to invest periodically, every month for example, whatever the stock market does. One time you buy at a higher price, another time at a lower price. That averages out, and so you spread your risk.

Actually, it is better not to check your investments every day, but rather to bury your head in the sand. So don't let fluctuations in the stock market throw you off balance, because you know: I'm doing this for the long term. And in the long term, the economy has always grown over the last 50 years.

Informed decision

Do you really think it's too stressful that you've lost some of your invested money, and are very worried about whether there will be even less left of the remainder of your deposit? So stressful that you can't sleep? Then you might consider selling your investments and settling for your current loss.

Ultimately, of course, you are the only person who can and may decide about your investments. Make sure that is a well-considered decision, and above all do what feels right for you.