Investing is a topic that everyone seems to have something to say about, but some so-called “advice” is nothing more than a bunch of investment myths. Here are 5 of these myths and the investment mistakes that I have seen people commonly make:
Investment Myth #1: I’m too young to bother investing in my retirement.
Like many people, you are probably saying you are too young to worry about retirement, even though you may be in your thirties. The reality is that you are never too young to think about retirement, because time really does go by quickly. Your retirement will only be your “Golden Years” if you actually start planning and investing in it now, so that you have money to spend when you reach that age, instead of working overtime and retiring later than others.
Investment Myth #2: I can make some quick cash on the stock market.
This is one of the most common investment myths. As a rule of thumb, only the long-term investors are rewarded by the stock market. In general, the stock market works like this: investors who are greedy and fearful lose their money to those who are rational and balanced. One of the biggest investment mistakes is being erratic and nervous about investing. Being smarter than others doesn’t count – you just need to be more disciplined than others.
Investment Myth #3: If you know and study the market more, you will make more money.
Of course, it’s important to know what is generally going on at the market, but if you look at the most successful investors out there, you will realize that they spend more time studying themselves and the individual companies they invest in, rather than the market as a whole.
Investment Myth #4: It’s important to time the market.
Many investors spend too much time trying to time the sale or purchase of their stocks and to determine when the market is high and low. So, of course, they want to buy when the market is at the bottom and to sell when the market is at the top. But this is not practical, since so many factors affect the stock market. It is practically impossible to predict all those factors correctly. So, the best thing to do is just stick with long-term investments.
Investment Myth #5: Invest in what’s hot, and you will make profits.
Investing in “what’s hot” now will mean that you are just following along with everyone else. If you do what everyone else does, then you’ll get what everyone else gets and nothing more. You should actually do the opposite and be greedy when other people are afraid. Going by the hot pick or the market trend of the month will not necessarily make you big bucks.
