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Six Common Investing Myths Busted
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Posted On :
Feb-28-2018
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Article Word Count :
516
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Our financial security is very important when it comes to planning our future, but common misconceptions about investing pose a serious threat to the future wealth. An investor will run the risk of damaging their way of life as long as he believes in harmful myths.
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Our financial security is very important when it comes to planning our future, but common misconceptions about investing pose a serious threat to the future wealth. An investor will run the risk of damaging their way of life as long as he believes in harmful myths. While determining the truth can be difficult, here our tax accountants in Maroubra have debunked six common myths that would harm investors and their financial well-being.
Myth #1
Investing = Gambling
Some people believe that investing is no different than gambling and one of the reasons people relate investing to gambling is that investing is a good way to make quick money. While investing and gambling involve risk of capital with hopes of future profit, they both have huge differences. Gambling is short-lived whereas investing can last a lifetime. Most commonly, average investors will do better investing in stocks over a lifetime than trying to win the World Series of Poker.
Myth #2
Picking Individual Stocks Add Value
Investors believe that they can choose stocks they believe will perform well in the future. But the reality is picking stocks has proven to be a losing game over the long term. Some assets may do well while others will inevitably go in the opposite direction.
Myth #3
Greater Risk Yields Greater Return
Yes, of course, there is a fundamental relationship between an asset’s risk and its expected return. But, greater risk has never guaranteed greater returns. Analysing historical data and investing tools enables investors to get a wide range of potential outcomes. This helps them to better understand the risk exposure of a stock and a range of outcomes they can expect.
Myth #4
Historically Successful Funds Perform Well
If you have decided to invest your money, keep in mind, past performance does not indicate future success. Keeping track of historically successful funds and expecting it to be successful in the future is a faulty strategy. It is better to remember that historical success and appreciation simply doesn’t indicate the same level of success in the future.
Myth #5
Investing is Only for People with Money
Even today, people believe that only those with plenty of money could truly make money in the stock market. The cost of investing has diminished considerably since online trading became a staple of investing. Today, anyone with an internet connection can create an online trading account and start investing. It only takes a little bit of money to get started. Anyone can do their stock research but having the necessary knowledge to make strategic investments is incredibly important.
Myth #6
Working with Professionals Isn’t Worth the Cost
Many people waste their time on studying investing and the stock market. But having a good financial planner in Maroubra helps you to understand and assess your long-term needs, challenges, and goals and determine a strategic path to that end.
A good accountant in Maroubra can guide you through retirement planning, investing strategies, tax issues, and more.
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Article Source :
http://www.articleseen.com/Article_Six Common Investing Myths Busted_321346.aspx
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Author Resource :
The author of this article is the leading accountant in Maroubra over a decade of experience in the industry. In this article, he explains six common misconceptions about investing. Visit https://accufin.com.au for more information.
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Keywords :
accountant in Maroubra, financial planner in Maroubra, tax accountants in Maroubra,
Category :
Business
:
Business
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