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The 5 Biggest Investing Myths The 5 Biggest Investing Myths

Finance is the crux of experiencing life to the fullest. Mr Robert Kiyosaki says, ” Financial freedom is a mental, emotional and educational process” Rightfully so!

Investing your money is not a simple process of trusting someone to give you better returns in the future. It involves a proactive approach and in-depth analysis. This helps you choose profitable investment opportunities, to get the best return on your investment.

There are few investment mishaps, that can curtail your financial freedom considerably.  With a range of financial institutions, both banks and private, choosing the best investment option is a stressful endeavour. Few Traps (aka) investment myths can be a very costly price to pay. We have gathered a few investing myths to guide you strategically.

 

1. Focussing on Recent Returns

Few investment options may seem to be performing really well, and they might entice you into a false sense of security that they will yield the best results in the long run. This is not an ideal assumption, as the market works in the pattern of ebb and flow. What might be successful now, might end up going down the success ladder before your investment period is complete.

How to Tackle?

Diversify your investment, instead of putting all eggs in one basket, so to speak. Choose a range of investment options, and build up an efficient portfolio. This gives your finances the best possible chance to thrive.

 

2. Trying to Time the Market

Few Finance media outlets may give you the best investment options, based on what is working well in the market right now. They might use statistics and complicated analogies to guide you to an option. In hindsight, it is a costly gamble to resort to, while deciding on investment options. It has been proved, time and again, that no one can time the market. Doing so will significantly damage your investment strength.

How to Tackle?

Always diversify your investment options. If you feel it is an ideal choice to time the market, use a small portion of your portfolio to play with. This will help you realize the worth or the possibility of timing the market.

 

3. Investing Overseas is Risky

The word international investment might strike fear in most individuals, as the fear of the unknown and putting their precious finances into an alien market doesn’t seem ideal. It might look like the local market is outperforming international stocks. This myth tows you away from diversified international investments that can perform very well for you.

How to Tackle?

Don’t count out international investment options out of fear. If you are still sceptical, you can choose a significantly small part of your portfolio and invest internationally. With a solid diversified portfolio including international stocks, you might find yourself profiting considerably.

 

4. Gold is a Solid Investment Decision

From time immemorial, gold has been seen as a performing investment with an inflating value scale. Contrary to this belief, the price of gold nugget varies and is priced on demand and supply trends in the market. It is still a good investment, but the returns are volatile.

How to Tackle?

We reiterate the same old mantra of diversifying your portfolio. Invest in gold, but also invest in other options, to get the best return on investment.

 

5. Conservative Investment in the Time Leading up to Retirement

Nearing retirement is an unsettling time for many. The thought of not having a regular monthly income might make your investment decisions cloud with ‘what ifs.’ It is understandable, as no one wants to risk or lose the finances they have accumulated with meticulous planning all these years. But, going too conservative with your investments, might affect your financial strength.  You need your investment money to grow, while you spend the available disposable income on your commitments.

How to Tackle?

It is a good idea to hire a financial planner as you near retirement. They can guide you towards best possible investment options. They can effectively guide you away from wrong investment decisions you might fall prey to.

Your investment decisions should not be guided by emotional triggers. This clouds your vision and might push you into an abyss. Dynamic and efficient investment plans will bear an abundant harvest!

 

Suggestion Reading:

6 Best Investments Options to Make Money

How to Triple my Investment

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