Falling prey to investing myths is common especially if you are new to the whole stock and bonds world. One wrong move or misbelief can land you in a financial disaster. It is crucial for you to know what’s untrue, so you don’t make a compromising mistake and help others as well.
The Top 7 Myths You Shouldn’t Believe In
Here are seven investing myths that you need to stop believing:
Follow your gut feelings
This is a hit or miss game that you can trust your gut instincts. Only buy stocks that you can afford. Invest when the market is going down. Even though you’ll be at a loss initially, it will be covered up in the later stage.
It can be complex
Try keeping it as simple as possible. Invest in a couple of low-cost index funds.
Only invest in good companies
Sometimes, top-performing companies can have underperforming stocks. These companies are probably reaching the plateau stage, where they are making low profits and becoming stable.
Dividend-paying stocks are better
Never put all your money in one stock. Keep everything diverse and invest in dividend-paying stocks.
Investing is all fun and dance
To be honest, it is as dull as it gets. Being a stockbroker isn’t an exciting profession. Instead, at times, it can be a very boring one, which requires your complete attention all the time.
Keep changing the investments
The lazy portfolio status is the key to earning more money. If you change the investment every month or so, you are lowering your chances of scoring sudden increases.
Select stocks on past performance
You can’t predict what is going to happen with you tomorrow based on today, so how can you predict stock behavior on its previous performance? Your safest bet is a diversified low-cost profile.