Kill These 10 Myths Of Investment On This Dussehra
Every investor dreams of making huge returns in
his investment journey. He wishes that his portfolio performs well in the long
run. But building a good portfolio requires a disciplined investment strategy.
One wrong investment can take you off the path of wealth creation. Therefore,
it is important to take wise decisions while investing in any investment
avenue. On this auspicious occasion of Dussehra, we list down 10 myths of
investing that you must not fall into so that your portfolio can grow and
prosper in the long term.
Investment Myths Everyone Should Avoid
· Investing is Risky
The biggest myth that exists around investing
is that it is risky. Yes, investments come with risk factors but if done with
proper understanding and discipline, they have the potential to create wealth.
A calculated risk can change your lifestyle and grow your funds at a faster
· You Need a Lot of Money
Another myth about investing is that you need a
lot of money to start it. It is a wrong perception. You can start SIP in mutual
funds with an amount as low as Rs. 500 a month. Easy to access online platforms
and various advisory services ensure that you can invest with as little amount
as you like.
· You Must be Expert
Since investing carries an inherent risk, most
investors think that investing can be done only if you are an expert. Suppose
when you invest in a company’s stock, you need to understand the company,
market situation, global news and many other factors. This makes an investor
feel he that requires some sort of expertise to track all this information. But
these days many instruments are available in the market that comprises of a ready-made
basket of various investments. Therefore, when you invest in such a basket of assets
you do not require any expertise. All you need is an understanding of the risks
· Investment Requires Regular Monitoring
People always think that when you invest in an
investment avenue, it requires constant monitoring. This is not true, as there
are multiple investment avenues where you need not monitor your investments
regularly. You may invest in a multi-asset fund and need not check it now and
then. By investing in low-maintenance investment options you can get rid of
· Right Time to Buy
There is a perception in the market that you
must buy stocks when they are low and sell them at their highs. Investors spend
a lot of time identifying the bottom and top of the share price. However, this
is not the right approach as predicting the bottom and top of a stock is
impossible. The stocks bought at right time will have the greatest impact on
your portfolio rather than timing them when to buy.
· Investments Are Quick Way to Make Money
People invest in the stock market or other
investment options thinking that they will make quick money. People with such
perceptions in their minds end up making losses in the market. Investments are
always meant for the long term. Give them time to grow to earn handsome
· Investment Would Lock Money
Many people avoid investing as they feel that
investing will lock in their money for years. This misconception makes people
stay away from different investment opportunities. However, staying long-term
in the market will protect you from short-term volatility and help generate higher
ROI. You may take the help of an advisor to find investment avenues where time
scales match your requirements.
· Saving Will Secure Future
Another misconception people have is that their
saving will secure their future. This is a myth as the value of the money will
reduce with the growing inflation. To secure the future one must put their
money at work for earning higher returns. Without investing, wealth creation is
impossible. Hence, investing in the right financial instrument will help you in
securing your future financially.
· Life Insurance is an Investment
One mistake that many investors make is
thinking of life insurance as an investment product. An insurance policy is
just a risk mitigation tool and would not generate any returns in the future.
To earn at the desired rate of return it is important to put your money in
different investment avenues rather than believing that life insurance is an
Some investors believe in concentrated
investing and do not diversify their portfolios. They keep investing in the
same asset repeatedly thinking it to be the right way. Making big money by
concentrated investing is very difficult. Diversification protects your
portfolio from risk and gives stability to portfolio. Thus, investing without diversifying
is not the right approach.
The above mentioned are 10 myths of investments
that you must kill this Dussehra. Just like Dussehra is the win of good over
evil, kill these evil thoughts of investments in your head and start your
investment journey. Overcoming the above myths may help you in earning higher
returns in the long run.