Misconceptions about investing
Do you think investing is only for wealthy people with a lot of knowledge of the stock market? Investing can be an exciting idea if you are not yet involved. But investing is more accessible than you probably think. You do not have to check the prices every day to be able to invest. You can also choose to take less risk with your investments. Because there are often many misunderstandings about investing, we have listed the 5 biggest misunderstandings about investing for the novice investor.
Misconception 1: Investing is only for rich people
You don’t need a lot of money to start investing. Even with a smaller budget, you can invest with a smaller deposit. What is important is that you can afford to lose this money. Investing is often done for the long term, so that your money has time to grow. You don’t want to be forced to sell your investments during a stock market dip because you need the money.
Misconception 2: You can lose your money in one go
Investing is risky, but it is unlikely that you will lose all your money at once. This is only possible if you invest your assets in one company that subsequently goes bankrupt. In order to reduce the risks , it is important that you spread your investments across different sectors and/or companies. You can also spread your investments in investment products by, for example, buying both shares and bonds. It is important to know that less risk usually goes hand in hand with a lower return on your investment. You can also limit the financial risk by not investing all your assets.
Misconception 3: You have to watch the markets all day long
You really don’t have to spend all day investing when you start. You can, but it’s not necessary. For example, you can have your money invested for you with an investment fund. This means you hardly have to worry about it yourself because an expert makes the investment choices for you. You can often just check the app or the website of the bank where you invest to see how your investments are doing. Especially if you invest for the long term, it is not advisable to constantly check the prices. This can cause you to make the wrong choices based on your emotions, for example because the price drops and you immediately decide to sell . Do stay informed about the financial market, but check this at a fixed time each week, for example.
Misconception 4: You need to understand the stock market to invest
Investing is for everyone. So you don’t have to know the ins and outs of the stock exchanges to be able to invest. If you don’t know much about investing and don’t feel like delving into it, it’s wise to invest your money in an investment fund. This party will then make the investment choices for you and keep an eye on all the figures. Do you prefer to do it yourself? Then you can select the right shares and bonds yourself . Investing in an index can also be a good solution. You can buy these products yourself at an online broker.
Misconception 5: There is a perfect time to start investing
Many people wait to invest until the perfect moment to get in presents itself. Unfortunately, this perfect moment does not exist. When the stock market is doing well, you may buy your shares too expensively. If the figures are actually in the red, you do not know whether the lowest point has already been reached and you are losing money. When you start investing, you are taking a risk. One way to limit this risk is to ‘spread’ your entry moment. This means that you do not invest all your money at once, but for example invest a fixed amount every month. One month you buy a little higher than the other month, which allows you to lower your average purchase price.
Want to start investing?
Are you convinced after reading this article that investing is something for you? Then start by choosing a broker. With our comparison tool you can easily compare all brokers, via this broker you can then invest on the stock exchange. It is important to choose a broker that suits you well. It is true that all brokers differ based on offer and costs, a wrong broker for you can therefore be an expensive mistake. Are you hesitating between multiple brokers? Then open a demo account and try them out without risk!