Common Investment Myths That You Should Stop Believing In

When it comes to financial investments, everybody will have something or the other to say. From the ‘conventional wisdom’ of your parents and grandparents to the new age ‘revolutionising instruments’ suggested by your peers, there is no shortage of advice when making the right financial decision. While your father might advise you to invest in real estate, you’d also have that one Linkedin influencer suggesting you never buy a property and only invest in stocks. Too many cooks spoil the broth, don’t you think? 

With the truckload of opposing ideas on investment fed to you by those around you, how can you then take an informed decision about securing your future? Don’t worry; we have got just the right piece of content for you!

In this blog, we will debunk some popular investment myths so that you can cancel out all the white noise as and when required and confidently make your investment choices:

1. Myth #1: You can only invest if you are rich enough

The most common investment myth is that the whole idea of your money making more money is exclusively reserved for the upper class. This couldn’t be further away from the truth! Even a regular entry-level salaried professional or student can start an investment as long as they have a minimum amount of 500 in savings. The earlier you start, the better! This way, you can multiply even the smallest savings amount and be better prepared for your future. Every penny counts!

2 Myth #2: You should go for higher risks if you want higher returns

When we say an investment has a higher risk, it is more volatile in its value fluctuations. This means that its value can either shoot up or plummet with a similar magnitude. While the former can lead to high returns, the latter can gravely endanger your capital. That is why it is not always necessary to take more risks to earn more returns.

3. Myth #3: You must own more stocks or funds to diversify

We’ve all been told that diversification is the holy grail of risk mitigation; the more diversified your portfolio is, the less one stock/fund’s plunge will affect your overall investment’s valuation. However, diversification is less about numbers and more about nature or character. If you purchase multiple stocks of companies within tech, a dip in the sector will affect your entire investment’s value. However, if you purchase funds or stocks of companies in the tech and finance sector, this type of double exposure will reduce your portfolio’s vulnerability to market swings in any one sector. Thus, a diversification strategy would mitigate risk. Reach out to the best portfolio management services provider for this. 

4. Myth #4: You have to constantly monitor the market

A lot of people who don’t come from a finance background feel discouraged from walking down this road because of how much research and financial knowledge are apparently required. However, this is simply not true. As long as you are not into intra-day stock market trading, you can simply invest in your desired financial instruments and let them be for long periods of time. In fact, the more you monitor the market, the more paranoid you get, which can lead to disastrous spur-of-the-moment market decisions. Do carry out some basic research on what mutual funds or stocks to invest in for long-term gains. The financial experts at Tailwind, a trusted online wealth management platform can surely help you in this journey. Download our app and take a seat as we plan out your entire investment journey for you!

Found this helpful? Stay tuned with Tailwind to continue getting credible and relevant investment information from wealth management experts.


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