In the world of investing, everyone encounters myths along the way. While some myths have little impact, others can severely hinder your investment success, potentially leading to significant losses.
To help you avoid costly mistakes, we’ve teamed up with Clement Thibault to debunk some of the most common investing myths.
POPULAR COMPANIES MAKE GOOD STOCKS
Just because a company is popular doesn’t mean it’s a good investment. Popularity can lead to inflated valuations or temporary price spikes, but that doesn’t guarantee long-term success. For example, General Electric (NYSE) was once a market favorite, yet it has lost over 66% of its share value in the past two years.
INVESTMENT FEES ARE NEGLIGIBLE
Investment fees may seem small at first, but over time they can add up to significant amounts. For instance, the difference between paying 1% versus 3% in annual fees on an initial $100,000 investment at a 7% growth rate over 30 years can result in a difference of $257,822—nearly half of your profit lost to fees.
THERE Is SUCH A THING AS A 'RISKLESS INVESTMENT' OR 'GUARANTEED RETURNS'
If someone promises a "riskless investment," it’s a red flag. All investments carry some level of risk, and anyone guaranteeing returns is likely misleading you. Always be cautious and remember the adage: "If it sounds too good to be true, it probably is."
YOU’RE TOO YOUNG/OLD TO START INVESTING
It’s never too early or too late to start investing. Whether you’re 20 or 40, as long as you have the capital, you can begin your investment journey. While starting earlier gives you more time to potentially grow your wealth, don’t let age be a barrier—just ensure you conduct thorough research.
Analysis and Research Are the Most Important Aspects of Investing
While analysis and research are crucial, risk management is even more vital. It’s important to ensure that no single position can jeopardize your entire portfolio. Always have an exit strategy and stay informed about market developments.
YOU NEED A LOT OF MONEY TO INVEST
You don’t need a large sum to start investing. Compounding interest can turn modest investments into substantial wealth over time. For example, investing $225 in 10 shares of McDonald’s in 1965 would have grown to $1.36 million today. Similarly, $1,700 invested in Starbucks (NASDAQ) stock in 1992 would be worth around $429,000 now.
What other investing myths do you think people should avoid? Share your thoughts
To help you avoid costly mistakes, we’ve teamed up with Clement Thibault to debunk some of the most common investing myths.
POPULAR COMPANIES MAKE GOOD STOCKS
Just because a company is popular doesn’t mean it’s a good investment. Popularity can lead to inflated valuations or temporary price spikes, but that doesn’t guarantee long-term success. For example, General Electric (NYSE) was once a market favorite, yet it has lost over 66% of its share value in the past two years.
INVESTMENT FEES ARE NEGLIGIBLE
Investment fees may seem small at first, but over time they can add up to significant amounts. For instance, the difference between paying 1% versus 3% in annual fees on an initial $100,000 investment at a 7% growth rate over 30 years can result in a difference of $257,822—nearly half of your profit lost to fees.
THERE Is SUCH A THING AS A 'RISKLESS INVESTMENT' OR 'GUARANTEED RETURNS'
If someone promises a "riskless investment," it’s a red flag. All investments carry some level of risk, and anyone guaranteeing returns is likely misleading you. Always be cautious and remember the adage: "If it sounds too good to be true, it probably is."
YOU’RE TOO YOUNG/OLD TO START INVESTING
It’s never too early or too late to start investing. Whether you’re 20 or 40, as long as you have the capital, you can begin your investment journey. While starting earlier gives you more time to potentially grow your wealth, don’t let age be a barrier—just ensure you conduct thorough research.
Analysis and Research Are the Most Important Aspects of Investing
While analysis and research are crucial, risk management is even more vital. It’s important to ensure that no single position can jeopardize your entire portfolio. Always have an exit strategy and stay informed about market developments.
YOU NEED A LOT OF MONEY TO INVEST
You don’t need a large sum to start investing. Compounding interest can turn modest investments into substantial wealth over time. For example, investing $225 in 10 shares of McDonald’s in 1965 would have grown to $1.36 million today. Similarly, $1,700 invested in Starbucks (NASDAQ) stock in 1992 would be worth around $429,000 now.
What other investing myths do you think people should avoid? Share your thoughts