4 Myths about Investing

 


 

If you have only observed the investment world from its peripherals, you may well believe that it is a world in which only City Slickers, having money to burn, can afford to live. However, once you learn more about investment, you will realize that it has become more accessible than ever before and that you do not need to be a billionaire to be able to invest.

In this blog, we will list down the most common investing myths as per Rizwan Ahmed CPA.

Myths about Investing:

Myth 1 – Only the Extremely Rich Can Invest:

While this may have been a fact in the past, the truth is that investing has become tremendously more democratic in recent times. Online advice services and investing platforms have introduced investing to the general public, and it is now possible to get started with quite little.

The magic of compounding interest means that you have a shot at getting rich even if you do not have much to invest. To drive the point home – if you had bought Starbucks shares worth $1,700 in the year 1992, the present-day worth of those shares would have been close to $450,000. 

Myth 2 – Popular Companies = Good Stocks:

Rizwan Ahmed CPA believes that the popularity of a company does not guarantee its growth or long-term success. A lot of popular companies are often overvalued, and are only enjoying a short-lived increase in price resulting from hype.

General Electric, for instance, used to be one of the most sought-after stocks in the market. However, over the last few years, GE share price has gone down by almost 70%.

Myth 3 – You Need to Keep Up With Changes in the Financial World:

If you have long-term investment objectives, short-term events like companies paying dividends or announcing earnings should not have any impact on your strategy.

Your portfolio strategy and investment selection should be based on your specific objectives and life, and should not be affected by day-to-day market events.

Myth 4 – You Are Too Old/Young to Begin Investing:

Whether you are a 20-year-old who thinks that they can invest later, or a 45-year-old who thinks that the time to invest has passed them by – Rizwan Ahmed CPA asserts that you are wrong. The only prerequisite for investing is the presence of capital and, as long as you fulfill that, you can start investing regardless of your age.

While it is true that, the earlier you start the higher the profit you can potentially make, but it also subjects you to more risks – since younger people have less money and, therefore, lower margins for error.

The point is that, when it comes to investing, Rizwan Ahmed CPA believes that age is nothing more than a self-constructed barrier.

Final Word:

To sum up, the investment space is full of myths, some of which can keep you from getting started or making promising investments and, consequently, costing you a great deal of money in the long term. For this reason, it is important to separate fact from fiction, and we hope that this blog will help you do just that.

Location: United States

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