Many people fear to invest in the market due to commonly circulated myths. In this article, we will be debunking investing myths to help ease your mind about investing.
You Need to Have Large Sums of Money to Invest
It is a common misconception that you need to have a large amount of money in order to make investing worthwhile. This is not true; you can have a successful investment portfolio with varying sums of money. There are many investment firms that have no account minimums, allowing you to invest with whatever you have.
The Stock Market is Too Risky
Many people view investing in the stock market as too risky. While there can be periods of drastic volatility, it is important to remember that overall, the stock market can allow you to make gains. This can be done if you invest with a long-term outlook. By keeping your cool and riding out rough periods, it is possible to end up with satisfying returns.
Stocks are the Only Investment Choice
Though it is often referred to as the stock market, there are other types of investments you can add to your portfolio. This could include bonds, mutual funds, or real estate. If you are nervous about taking on too much risk adding some of the alternatives can help to return your exposure.
Success Depends on Picking the “Right” Stock
Another myth that intimidates people from investing is the fear that their investments will fail if they are unable to pick the “right” stocks. While picking a good stock can help contribute to a successful portfolio, it is not the key to the best return. Often the most successful portfolios are those that are well balanced with a wide variety of investment types. A balanced portfolio will let you take advantage of overall market performance. This reduces the stress of putting all your eggs in one basket by relying on the performance of a few stocks.
I Do Not Have the Time Required to Invest
In the minds of many potential investors, investing will involve them spending hours each week doing market research and trading stocks. While some choose to invest this way and enjoy it, it is not necessary. There are many funds you can choose from that will allow you to set it and forget it. You can also utilize an investment advisor. This is a qualified professional that will manage your portfolio. Thus, giving you the potential to maximize returns while minimizing stress and involvement.
When the Market is in Decline-You Need to Sell
This myth is one of the biggest investing mistakes you can make. By selling off during a decline, you are guaranteeing losses. This will be the case even if you decide to never invest again. However, it is even more detrimental if you decide to reinvest when the market is on the rise again. You will end up taking an even bigger loss by paying a higher price of the purchased funds. Though it goes contrary to most people’s instincts it may be beneficial to purchase funds during a decline. Doing so may allow you to get a good deal on stocks that will rebound quickly, allowing you to increase profits.
Choosing to Invest
It is our hope that by debunking investing myths we can encourage more people to invest. If you are uncertain on how to get started, meet with a qualified investment advisor who can help you get an account set up.
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