Investing for Beginners (cont'd)
by: Dr. Boyce Watkins

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Myths About Investing

1)      You need lots of money to invest

You can start an investment program with many mutual funds with just a few dollars a month.  Also, there are investment clubs being formed every day that you can join.  Finally, with just a few hundred dollars, you can join a mutual fund, or have just a few dollars taken out of your paycheck for investing.

2)      You can easily make a lot of money investing

Some people get rich quick and easy with investing, but this is not the norm.  Most people who build wealth through investing do it with a slow, consistent strategy.  They buy more when the market drops, rather than run away.  A lot of people get the wrong impression of the market when they see overnight success stories on the news.  They also got the wrong impression during the 1990s, when the market grew very fast.  Consistency is the key.

3)      You can easily lose a lot of money investing.

It is not easy to lose money investing if you are smart about it.  Being smart basically means that you are well-diversified and patient.  If you do these two things, you are going to be fine.

4)      You have to be a financial wizard to invest

Investing simply means having your money come out of your check every two weeks and letting that money go into a mutual fund or some other place where your money can work for you.  If you are under 55, the investment should not be a CD.  Go to the website for a brokerage firm, ask them for help, and you can get started in 10 minutes.  If you do not try to outsmart the market, then you are going to be fine.

5)      My stock broker can predict the stock market

It is nearly impossible to predict the stock market. Brokers who tell you they can predict the market are usually lying to you.

 

 

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