Common Investment Myths Debunked

There are many finance myths persisting in the society as people are still glued to old school ways of investments. The old saying “it’s better to keep your money safe in your savings account than investing in riskier portfolios” doesn’t hold ground today. Most of the people still think managing personal finance perfectly is difficult in terms of complexity & planning. This blog is an attempt to reveal the existing myths related to personal finance and in turn, educate investors on how to plan and execute their finances.

Myth #1: I’m too young to start investing         

When you’re young, it’s difficult to look too far into the future. You’re living in the moment and enjoying a vibrant social life. There’s plenty of time to think about investing when you’re older, right? Wrong. Time is of great advantage when it comes to investing. Long-term investment strategies tend to be less volatile and may help build your wealth through compounding of interest.

Myth #2: Investing requires a substantial time commitment       

Many people believe that they must commit long hours to monitoring their investments – this couldn’t be further from the truth for certain type of investments. Many investments demand a long-term strategy or are professionally managed and require little monitoring.

Short-term share trading does require some time and effort in constantly tracking market movements and companies’ performance so that you have enough information to make the right investment decisions.

Myth #3: Investing is for the rich

If you think investing is just for cashed-up CEOs and Ferrari-driving stockbrokers, you’re mistaken. You don’t need millions to start an investment portfolio – even a small capital investment may deliver returns over time.  Investments such as Unit Trusts may potentially support diversification across different asset classes and geographies, depending on the fund’s investment strategy.

Myth #4: You need to be knowledgeable about the market to invest

While it’s true that investing in the stock market requires considerable expertise, there are many other investment methods that only require some basic market knowledge. For example, Unit Trusts employ expert fund managers who decide how, where and when to invest the money that you contribute. And it has never been easier to access good financial advice.

Myth #5: Investing is too risky

Most of us have heard stories about people losing their money in failed investments. Reach out to reliable and expert financial advisors who can help you plan your investment portfolio based on your financial goals and risk appetite. You can also talk to them about diversifying your portfolio, spreading your investments across a range of aggressive, high-risk and conservative, and low-risk asset classes. This may potentially help to mitigate risk while maximizing returns.

Conclusion

Investing isn’t as complex, time consuming or risky as you may assume. With a reliable financial advisor, you can put together an investment portfolio that suits your financial needs. And the younger you start, the more time you have to build your wealth over the long term.