Misconceptions About INVESTING That Can You Hinder For Life
[ Misconceptions About INVESTING ]
There are a lot of misconceptions surrounding Investments. This misconception has hindered some people from investing.
One of the greatest hindrance to advancement in any area of your life is lack of appropriate information or wrong misconception we have built over time due to experiences we have had in the or that of those around us.
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I remember an experience i had some years ago. This was at a time when lots of people where becoming aware of Forex and the various financial opportunities that came with it. “I studied a lot on it and I believed so much in investing in it (Forex) that i encouraged every one around me to do so. i went into it with little capital but since i educated other on the benefits of investing, some of my closes associates dive into Forex based on my advice with little or no proper knowledge. And guess what? They lost their capital massively. it was a bad place to be to see your close allies lose funds on your account. That whole experience built in me, very deep fear and misconception in my heart against Forex and similar investments till lately.
It is vital to look for the truth and effective knowledge surrounding investing can be worth while
In this article, quickly list some of these misconceptions;
You need big funds to make investments:
It is a normal believe that big fund is needed when making investment. This is true in the sense that the bigger your investment fund, the bigger your earning. But they do not realize the fact that shares can be bought for a price lower than $200 with an annual returns of 7%. If the Investor holds the stock for 40 years they returned to be up to $3000. Yes investing big time can brink lots of interest over time time but you have got to start from where you are par time. In essence, small investment can also grow your capital as long as you have patience to wait.
You need all your savings during retirement:
It is believed that at retirement you need all the cash you can lay Your Hands on, that includes your savings, this enables you pay for all your expenses. Well there is 4% rule and strategy we must not forget at retirement which says if you withdraw just 4% of your savings from each retirement year, you will have created a system that allows you to earn more after retirement. Well, the best thing to do is to work with a consultant to know which stock is worth holding on to or cashing out on. This will reduce your risk and also help you to earn more.
Bonds are safer than stocks:
It is true that bonds has more stability than stock when the stock is left for a short-term, this is due to the instability in the stock market. But if you keep your stock for a long time you will make some earnings from it.
This is because the stock market fluctuates on monthly basis but when view on yearly basis you will notice the graph is constant
Investing in stock is like gambling in a casino:
Investing in stocks is like gambling when you invest in a high-risk stock with the sole aim of making quick Returns. But if you make a proper research on the stock Investments you are about to make, you will be sure to make up to 10% annual Returns. Adequate knowledge is key for any investment you intend to go into.
Good performance in the past means good Returns in the future:
this is great misleading mental conception because that some particular stock did well in the past has nothing to do with their performance in 2 months time. Some of us had followed this trend in the past. If you do so, you are bond to lose your savings and your capital
Due to fluctuations in the stock market, it is best to make a long-term investment plan with a quality stock so you do not get disappointed or bankrupt when the stock does not give you the expected Returns.
The best way to know the truth about investing is making a thorough research on the stock you have interest in making an investment in. It is also wise to meet financial experts to advise you on the proper or quality stock to investment in.
[ Misconceptions About INVESTING ]