Friday, October 11, 2013

Five Misconceptions About Investing in The World Today

misconception on investing
The moment we conceive an idea to do something then the devil fear set in trying as much as it could to calm our enthusiasm to get it done. Investing is not of exception as new investors do hear more about risk and other uncertainties the stock market poses to its investors. These commentaries have clouded most people’s mind to extend that  they have developed misconceptions about stock market investing. This has resulted in people developing  a lot of alibis for investing and in effect deny them of the biggest wealth creation platform in the world. The following are some of the misconceptions we have developed all this while.
1.      The believe that those who are rich on the stock market were lucky in their time is a misconception. The rich investors have a common definition for luck that runs, preparation plus opportunity equals success. No one will ever be lucky on the stock market if that person fails to do enough research about the investment they buy or invest in. However, some might have inherited wealth from their parents but that might not guarantee their success on the stock exchange
2.      Another misconception is money make money on the stock market. The fact is information do, with quality information you can profit from the market with little amount of money. The most interesting aspect is that this generation is the luckiest of all generation in the world history because of the abundantly free information available. Hook onto the wagon and get yourself inform about investing.
3.      Most people believe investing is very risky. I have a colloquial saying that if you know investment is risky try old age. A close talk with most elderly people reviews their regret for not taking certain amount of risk in their youthful days. The greatest clue here is to learn to take calculated risk by assessing the risk and how you can manage it. I am not suggesting how you can avoid it.
4.      My financial adviser knows it all is a great misconception one should avoid. Nobody can have the crystal ball to the financial market. In addition, some of the financial advisors are just salespersons and not financial expert. In view of this, they only sell their stocks to you and might happen that they themselves are not investing in it. The catch here is, you need to put your hands on the wheels to avoid any untold stories. It is perfectly good to have a financial advisor but that fellow must be chartered financial planner (CFP).
5.      Fees are expensive on the stock market. This is never true and the only thing you should do is to shop around, for there are numerous investment houses whose charges are less than the stipends we usually give at the bar and restaurants. Our problem is we always allow people who have failed in one area to talk us into things they themselves do not know much. You having enough information about the fees the brokerage firms charges will erode this misconception.
In conclusion, misconception ignites our human nature to enquire for more. Your ability to know more starts when you realize you have a lot of doubt and you want to clear those doubts. Humans cannot be perfect unless we keep eliminating the odds we have. The facts I have enumerated above should serve as a guide to drive your financial dream into reality.