3 Investor Myths That Could Impede Your Success

The world of investment can be daunting to the newcomer. There are a whole lot of complex sounding terms like Forex and Cryptocurrency. You look on in bewilderment as people nod sagely at images of squiggly lines or red and green dots moving up and down on a graph. In this potentially bewildering climate, it’s not uncommon for neophyte investors to take any advice they hear as gospel, regardless of the veracity of the source. While the digital realm provides a lot of helpful information that can help people from all walks of life to become investors, quality trumps quantity every time. As with any other subject, for every piece of well reasoned, well researched and analytically minded information on the complex nature of investment there’s an article written wirth apparent authority with no basis whatsoever in reality.

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There are no ways to “get rich quick” in the world of investment, but that won’t stop somebody from making outlandish claims that they’ve doubled or tripled their investment within 6 months at any given cocktail party. Success as an investor requires making well informed and judicious decisions about where and when they invest. In order to do this effectively, it’s important to dispel some long standing myths...

You don’t need a broker to trade

Okay, this one is technically true. All you need to trade is money to invest and a digital platform that will allow you to make and track your investments. But just because you can trade without a broker, doesn’t mean you should. While it’s important to find the right platform for you, a good platform is no substitute for a broker. There are different types of broker and finding the right one for you is a very important first step. At the very least a broker should help you establish some realistic long and short terms goals and help you to devise a strategy that will allow you to meet them.

Losses are okay if you have reason to believe your investment will be a home run

Some would have you believe that losses are acceptable if you have reason to suspect that a red hot stock tip will pay off any day now. Unfortunately, the reality is that losses hurt you more than gains can help. A loss of 50% on an investment will require you to make back 100% just to break even and that’s… pretty unlikely.

Long term success lies in limiting losses. Sure you may take the occasional hit but by subscribing to services that will send you company specific news and keeping abreast of industry wide changes, you can mitigate your risk substantially.

The key lies in knowing your market

Knowing your chosen market is important for sure but it’s just one piece of a big puzzle. It’s far more important to know the ins and outs of the company you invest in than the market at large. A rising tide does not always raise all ships, and an upturn for a general market does not insulate an individual company from loss or risk. The key instead lies in keeping your portfolio diverse, keeping a close eye on the news and having a good relationship with your broker.