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In todays video we talk about the 6 myths of stock market investing.

The very first myth I want to talk about is that it is ‘risky’. I understand why young people have this perspective about investing. All they hear about is the major up’s and down’s of the market and how some people will ‘lose everything’ during a market downturn. The truth is that there are plenty of smart ways to invest you money that will keep you money safe. There is always risk when it comes to investing but some investments are riskier than others. For example, a penny stock can double your money over night, but you could also lose your entire investment. Investing in blue chip stocks will have a high probability of showing you steady, small returns over the course of the next decade and minimize risk.

The second myth is that it is hard to get started. That is completely false. If you have an internet connection and a laptop, you can setup your own investing account in minutes and begin trading within a day or so.

The third myth is that stock market investing wont make a big difference in my financial life. This is completely false. I don’t want to cover the power of compound interest in detail, but to summarize…If you invested $100/week starting at age 20, you could very well have a million dollar portfolio by age 70 while your total investment contribution may only be 200k-300k. That’s a net worth that is 4-5 times greater than if you didnt invest at all!!!

The fourth myth is that ‘i dont have enough money to invest’. This may be true, but it probably isn’t. When I started trading, the transaction fees were $25-$50 per trade, meaning that you would need to invest $500 at a time in order to get a good return on your money. These days all you need is $100 because most broker fees are about $5 per trade. $100 is a fairly small amount of money, and if you dont have $100, find a way to either make an extra $100 or cut out $100.

The fifth myth is that you financial advisor has your best interests in mind. That isn’t always true. MOST financial advisors pick up commissions when they put your money into certain funds. They are incentivized to put your money into only a basket full of mutual funds that may not align with your interests. That is why you should always check to make sure your advisor is a fiduciary, or just invest your money by yourself.

The sixth myth is that past performance will indicate future earnings. This is not true, with a few exceptions. Companies that have been around 50 years plus, have had constant growth, and don’t have any other company taking their market share away, is likely a good indicator that they will have good future performance. However, stocks like that are very rare. Most stocks will have big swings, have really good or bad performance over the course of 3 months, and may have the exact opposite over the next 3 months.

 

 

 

Youtube Video Link: https://youtu.be/6ZqjKU0pL-M

Learn More: http://bit.ly/2qxfONO

Itunes Link: https://itunes.apple.com/ca/podcast/the-jack-chapple-show/id1178033547

My Stock Market Mastery Course: http://bit.ly/2hurfQO