How to overcome the fear of losing money
Our brains are wired to feel a loss about twice as strongly as an equivalent gain. Understanding that bias is the first step to investing through it, not around it.
When markets feel uncertain, the temptation to keep money in cash rather than invest it can feel like the safe choice. It rarely is: cash that isn’t growing faster than inflation is quietly losing ground, and history shows that meaningful long-term growth generally requires exposure to risk assets such as shares.
Where the fear comes from
Research shows the pain of losing money is roughly twice as strong as the pleasure of gaining the same amount — losing R1,000 hurts about twice as much as gaining R1,000 feels good. That asymmetry is a well-documented behavioural bias, not a personal failing, and it shapes investment decisions more than most people realise.
One of the biggest risks investors face is behavioural, not market-driven: if an investment performs differently from what you expected, the temptation is to change course or withdraw, locking in a loss that a calmer response might have avoided. The other common risk is simply overpaying for an investment in the first place, chasing a price rather than buying at a level that reflects its actual worth.
What actually helps
- 1Understand why you’re investing, so your choices stay aligned with your actual goals rather than the market’s mood.
- 2Know your investment manager’s philosophy, so short-term swings make sense in context rather than triggering panic.
- 3Keep a long-term view. You still have to live through the short-term ups and downs, but reacting to every one of them tends to cost more than it saves.
- 4Talk to an independent adviser about your real risk profile, rather than guessing at it under pressure.
This article is general information and not advice. Silke Financial Services is an Authorised Financial Services Provider, FSP No. 12462.