5 Myths About Investment Busted

We all have different levels of knowledge, understanding and interests for different aspects of life. A cursory knowledge in this age of internet is a major challenge subject matter experts are facing when dealing with clients in their respective domains. An example is health and nutrition; the net is abuzz with all kinds of misleading information.

Some say ghee is bad while others recommend it as the next best superfood! Some say brisk walking is the best while gym rats swear by weight training. In this age of information overload, there are a lot of myths floating around.

This is true in the world of investments as well. Let’s look at some common myths about investments you may have come across.

Myth 1: Stock Markets Are Not Safe

Of course, they are! This myth still exists in many households. Investing in stock markets is akin to gambling for many. It is, only if you invest based on dubious tips and with zero research.

We don’t deny that there is some speculation in the short term, but in the longer run everything averages out. It is, therefore, important not to miss the woods for the trees. The stock markets give a great opportunity for the citizen to claim part ownership of businesses, thereby, letting themselves become a part of the company’s growth process. So if you think it’s all gambling, think again!

Myth 2: Real estate is the Best Investment

Maybe, maybe not. It entirely depends upon when you invested and for what purpose.

Real estate in the last 3 years has yielded negative returns in some places. In fact, if you own a house, advertise to sell it. You will immediately understand the mood of the market in your locality. Real estate is a tricky investment. It is illiquid (meaning its difficult to sell) and one needs to hold it for a very long term. Do read our post on calculating the true gains from a real estate investment to understand better.

Myth 3: Bonds are Boring

Often the unsung hero of investments: Bonds. They are relatively risk proof and earn higher than bank deposits in the long run. Debt funds and bonds are forgotten by most even though they are attractive investment options. This is due to poor advertisement and awareness. Next time you speak to your investment advisor, don’t forget bonds.

Myth 4: Savings Make You Rich

Saving is a great habit only if you invest the savings wisely. If all your savings lie in your savings  account, then your money is sitting idle. Value of money decreases with time with inflation, therefore you need to make your savings earn money for you. Disciplined saving is just 50% of the task. Investing your savings in the right avenues is what will make you rich.

Myth 5: Investment is Not My Cup of Tea

I have saved the worst for the last. Nothing is beyond human intelligence. Investing is easy, if you put your energy into it. The best thing you can do for you and your family is to continually educate yourself in the subject of investing. It is after all your money and future at stake, isn’t it? Use resources on the internet and keep yourself educated. It is never too late to invest.

Myths are called myths for a reason, that they are not true. Don’t believe anything blindly but at the same time don’t dismiss anything without reasoning and analysis.

As the famous saying goes, “In the land of the blind, the one-eyed man is the king”. We urge you to open your eyes to your financial future.

Arjun Balakrishnan is an investment fanatic who loves writing about investment topics. He regularly writes at Investment Gyaan.