5 Investment Myths You Probably Believe.

Many people put off investing because they feel uninformed about the process. So many myths about investing are floating around, it’s no wonder people aren’t comfortable trying to make some extra money. If you hear any of these falsities about investing, forget them immediately. They’ll only hurt your opportunities to become an investor.

You Have to Be Rich to Invest

That old saying “you have to spend money to make money” is true in a sense. You do need a little bit to invest if you want to gain any returns. However, you don’t need to open accounts with hundreds of thousands to make money. Apps like Acorns and peer-to-peer investment opportunities allow people with small amounts of extra money to get in on investing.

High Brokerage Fees Are Normal

Some financial firms like to send the message that they can somehow make you more money than all their competitors. Whether they claim to have an investment nobody else knows about or tell you they possess a great formula for success, they’ll try charging higher fees. The rationale is that you’re paying for expertise, but in reality, those higher fees are just cutting into whatever money you do make. If a firm doesn’t offer competitive fees, look elsewhere.

Passive Investing Won’t Make Money

A fund without a manager constantly buying and selling on behalf of the investor is a passive investment fund. These funds mirror specific indexes. You may have heard brokers claim that passive investing makes you no money, and you need an active portfolio if you want any significant return. In fact, active investing has not been proven to perform better than passive over the long term. Do whichever you feel more comfortable with.

Binary Option Investing Is Too Complicated

Binary option investing is a zero sum game, in which whether you make money hinges on a yes or no question. For example, do you think the price of gold will be above a certain amount by 2 p.m. today? You buy in based on your answer, and if you answer correctly, you make money. Binary option investing isn’t complicated; you simply need knowledge of the assets in question before you put any money down so your choice is more likely to be correct.

You Have to Know About the Market to Invest

Keeping an eye on the market is smart, but you should spend more of your time learning about the businesses, niches, and people you’re investing in. Knowing general market trends won’t help you understand whether or not a company’s supply chain is about to go bad, thus tanking your investment. Studying the industry itself and knowing about the company gives you the information you need to make salient investment decisions.

If you’ve believed any of these myths in the past, don’t worry. Now you know the truth and can adjust your attitude toward investing accordingly. The point is if you want to become an investor, you have many options beyond the traditional that will allow you to do so.


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