The top 5 myths about investing

The term ‘investing’ is often mistakenly associated solely with investing an incredible amount of money. In reality, it is possible to become an investor and achieve capital appreciation with small amounts of money. We will try to dispel the five most popular myths about investing.

Investments are like a lottery or gambling
Wise risk-assessment yields a steady return. Excessive caution leads to stagnation, while ignoring the dangers can lead to large losses. By capturing large chunks of time, the risk when investing in business assets flattens out and there is a positive momentum. In casinos, the depositors always outnumber the winners. And companies grow, providing all investors with the opportunity to make money. Downturns in stocks are replaced by vigorous growth (no change in casinos). The penny lottery draws large sums out of the player’s pocket, and the chances of becoming a winner are negligible, there is no reason to count on long term trends.

Only experts are capable of investing competently
The complexity factor of the financing tools was relevant at the beginning of the last century, but gradually there have been simpler mechanisms for dealing with investments. Newcomers can now start by investing in shares of small companies or opening personal investment accounts. A few months’ salary should be set aside, creating a ‘safety cushion’. Investing your last penny is not a wise idea. When buying stocks, look to companies you have previously had an interest in. That makes it easier to navigate trends and correctly assess the situation based on various factors: demand for goods and services, headcount dynamics, changes in management interests, prospects, and so on.

You need millions for effective investment
Today, initial investment portfolio amounts can start from several thousands of roubles. Billionaire Warren Buffet, who bought his first couple of stocks at the age of 11, is a successful example of investing small amounts. For more than 70 years, he systematically added to his portfolio and achieved impressive results. Apart from stable portfolio additions, other factors have influenced the story of the famous investor, but that does not stop him from stating that it is possible for everyone to enter the investment market. At several thousands profit will be minimum but periodical increasing of portfolio after getting acquainted with nuances of the market will allow to reach worthy earning.

You will have to invest your money for decades
Long-term investments are more reliable and are not affected by market fluctuations. Such protection extends to investments of 5 years and longer. Short-term and medium-term investments don’t have this advantage. But they offer other advantages to the investor, such as the use of current values, the sale of assets in a range of months or years. The lack of freezing of funds allows you to change the scope of your investments or even adjust the way you use the financial asset.

Constant monitoring of indicators helps to wait for the ideal moment
Here we have to dispel two myths and state that there is no ideal time, and round-the-clock monitoring of indicators is impractical. Conditions are never perfect. If you weigh the pros and cons too carefully, you can miss out on profitable deals. You should start investing if you are financially able and willing to participate in stock trading. Modern technology makes it possible to find out news about important companies in a few hours a week, to assess the information and to make decisions.

Careful and thoughtful investing will gradually lead to the formation of considerable capital. The markets are always favourable to those who have patience and act in a balanced manner.