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Kill The 10 Myths Of Investment On This Dussehra October 04 2022Stock Market Education

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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.

10 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 pace.


· 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 that exist.


· 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 regular monitoring.


· 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 rewards.


· 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 investment.

 

· Diversification

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. 

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