This article aims to debunk some common investment myths so that new investors can make informed investment decisions. In reality, you can start investing with just Rs.500, contrary to the myth that investing requires large amounts of money. Investment is also viewed as risky, but the risk can be minimised with the right strategy and diversification. Monitoring investments every day is also a myth, as frequent monitoring can increase costs, reduce returns, and increase taxes. As well as emphasising the importance of investing as a long-term investment strategy, the article emphasises that getting rich quickly shouldn’t be the goal. Lastly, the article dispels the myth that only wealthy people can invest in FDs and get the best FD interest rates. Anyone can make smart decisions, regardless of their financial background.
New investors can find investing intimidating, especially with no prior experience. Investing can be overwhelming, however, because of many myths surrounding it. Certain myths that many people are aware of make it difficult for them to make informed investment decisions. As a result of this misinformation, they may miss out on opportunities that could give them potential returns. In this article, we will try to make sense of these particular myths so that you can make smarter decisions once you know the truth about investing.
Myth Number 1: Investing requires a lot of money
A myth that many people seem to believe is that investing is only made for the individual with a high-income level. In other words, they seem to think you need a lot of money to start investing. That couldn’t be further from the truth. Today, one can easily begin on any Investment option with a minimum of ₹500. There are plenty of exchange-traded funds and mutual funds that have this requirement. It is easy to start investing in either of these pictures for a few thousand rupees.
You can save and invest simultaneously through smaller investment options like recurring or fixed deposits. These particular deposits are available through most financial institutions and banks. As you can see, investing does not require a lot of money. So we can safely say that this myth is false. With your options available today, you can invest a small amount and build your portfolio overtime.
Myth Number 2: It is risky to invest
Making an advertisement risky is another common misconception. In reality, investing has a certain degree of risk, but not all investment plans are equally risky.You can easily choose from over righty of investment options that have a low-risk profile and can provide you with stable returns.
For example, fixed deposits and government bonds can provide low-risk investment opportunities with guaranteed returns. Additionally, mutual funds and ETFs tracking well-established indices, such as the Sensex or Nifty, can provide moderate returns with a lower risk profile. The right investment strategy and diversification will mitigate risks and maximise returns, so investing is not inherently risky.
Myth Number 3: Monitoring your investments on a daily basis is essential
Many investors believe they should constantly monitor their investments and make daily trades to maximise returns. You can easily monitor investments closely, but it Can hurt your returns.
Studies have shown how frequent monitoring of trading and investment can lead to higher costs, lower returns and increased taxes.Long-term investment strategies can be based on diversified portfolios designed to withstand market volatility. They are better than relying on short-term investments.
You can easily reduce the risk of losses and benefit from long-term growth when investing in well-diversified portfolios and other assets. As a result, you can develop sound investment strategies and stick to those strategies instead of constantly monitoring your investment.
Myth Number 4: You can get rich quickly by investing
Investments are often seen as a means to get wealthy faster. However, investments should be seen as a way to secure long-term financial goals. In other words, it requires planning coma patients and discipline andshould not be achieved in a hurry.
There are options like mutual funds, stocks, and ETFs to cater to several goals. Such options are designed with long-term investment horizons in mind. Having realistic expectations and understanding that most investments should be done with a long-term goal in mind is critical. Building wealth and achieving financial goals overtime weekly is possible through regular investments and a well-diversified portfolio.
Myth Number 5: A successful investor needs a lot of knowledge about investing
There is a belief that one needs to possess a great deal of investment knowledge to succeed as an investor. There is some truth to this, in that you need to follow the industry to keep track of various updates, news and events happening in it. Knowing more about investing can prove helpful, but it is not a prerequisite for success.
Your other option is to work with a financial expert who can monitor your investment schemes and keep you updated on what is happening. Exchange-traded and mutual funds are 2 options better suited for novice investors. You don’t need a deep understanding of finance to invest in these options since professionals manage them.
Myth Number 6: It’s only for the wealthy to invest
It is smart to apply for a fixed deposit with Bajaj Finserv because the application process is straightforward and hassle-free. Investors don’t have to waste time and energy debunking financial myths because of their competitive FD interest rates and easy application process. Investors are provided with all the necessary information upfront by Bajaj Finserv, which enables them to make informed decisions. In addition, they provide a range of investment options that can be customised to suit different investment requirements.
It is a common misconception that investing is only for the wealthy, but this could not be further from the truth. Irrespective of their financial background or income level, anyone can make compounding and benefit investing decisions.
Investors with varying investment goals and income levels can easily choose from various options. The easiest way to get started on any option is, to begin with a small amount invested into any tax-saving fixed deposit or mutual fund. These two solutions are known as systematic investment plans or SIP.
Additionally, with the introduction of so many new online investment platforms, people find it easier and more convenient to begin an investment. Thanks to their low minimum investment requirements, beginners can easily invest on many investment platforms.