Common Investing Misconceptions
There are lots of misconceptions when it comes to investing, and we want to clear the air on a few of them.
Higher risk leads to higher returns.
- While there is potential for a higher return when you take on higher risk, it is not guaranteed. Taking on a higher amount of risk may not be worth your peace of mind if you tend to be risk-averse and cannot stomach the volatility.
Trading costs are not important.
- Trading costs take away from the assets you’re wanting to invest so it’s important to be strategic and mindful of them. Trading products frequently where a Custodian charges commissions can add up over time, especially when lower dollar amounts are being traded.
Checking your portfolio daily is necessary.
- Investing for most people is for the long-term, and volatility is the nature of the stock market. What changes in the market from one day to the next is not as important as it seems when you plan on investing for several more years or decades. History shows staying invested through the highs and lows pays off in the long run.
There are endless outlets to turn to when you’re getting started. Whether you’re investing for yourself or are working with a financial advisor, it’s important to be informed.