Investing isn’t something reserved for just wealthy people or brokers. Advancements in the online investing industry have made it easier than ever before to get your money into the stock market. Some people hesitate when they hear about investing because they believe a few pesky myths that linger regarding the market.
Today, we’re dispelling a few of those myths about the stock market to help you feel a bit better about the prospect of sinking your money into some stocks and bonds. After all, savvy money management is the key to unlocking your financial future.
The first myth we’re dispelling is the idea that you can lose everything you invest. While it’s technically possible for all of your investments to bottom out, this is an unlikely event. You might hear about people losing everything on the stock market. People who say this usually sank their life savings in a single stock or fund.
When you’re crafting your investment portfolio, you need to diversify your assets. That doesn’t just mean owning stock in different companies. A well-diversified portfolio includes shares of companies from vastly different industries. If you invest in Microsoft, don’t take positions in Apple, too. Instead, buy shares of General Motors or Coca-Cola. That way, if one industry has a bad year, your other assets will continue to grow in value.
Movies and TV shows can present the stock market as an unknowable and complex matrix of transactions. How can an untrained investor make any money in such a complicated field? Well, here’s a poorly kept secret: most investing isn’t that complicated. Buying shares of a company that performs well usually results in your portfolio experiencing gains.
While it’s ideal to only invest in financial products you understand, the truth is that most stocks and bonds are straightforward. Sound investing is as easy as following trusted stock indexes and making consistent contributions.
Another pervasive myth that keeps new investors out of the market is that investing is only for rich people. Fee-free trading apps like Robinhood allow newcomers to start with no money up-front. Most of these apps also allow traders to buy fractional stocks, which lets them invest at their own pace.
Making consistent contributions to your investments adds up over time. You might start with only a few dollars every week, but you might soon find your portfolio growing to support more robust investments in other shares. The only limit is how much you’re willing to set aside for your ventures!