Understanding investments can be daunting, and there are several myths that are likely to put you off if you are new to investing. In this blog, we’ll debunk five misconceptions about investing. By unravelling these myths, you’ll gain a clearer perspective on how to navigate the world of finance and make informed investment decisions.

You need to be wealthy
You can invest with less than you may think. Making small regular investments can provide more benefits than investing a lump sum. You can invest a small amount into the markets every month. One big benefit of investing a small regular sum is that, instead of saving your cash until you have a lump sum, you’re putting your money to work straightaway. Even with rising interest rates, leaving money sitting in a bank account can be less profitable than investing it in the market.

It’s too much of a risk
With any type of investment, there is a risk of losing your money. It’s all a balance between risk and reward, meaning the greater the risk, the greater the potential reward. If you understand the risks involved and the level of risk you’re comfortable with, you’ll be able to make an educated decision as to whether it’s worthwhile.

You need to know the best time to buy
Most people think you need to invest when stocks are low and sell when they’re high, but there are so many factors that can change the stock market, it’s pretty much impossible to predict the outcome. The best thing to do is start investing as soon as you can for as long as you can. There may be fluctuation, some good and some bad, but the longer you’re able to hold onto your investment, the more time you’ll have to recover from any lows.

Your money will be inaccessible
It is true that the longer you keep your money invested, the more chance you have of making a return, however this doesn’t have to mean your money is inaccessible. There are lots of investment options where you can access your money at any time. You should leave your investments untouched for them to have the most potential, but should a situation arise where you may need your funds, you will be able to access them.

You have to monitor your investments everyday
Checking your investments every day can lead to risky decisions such as changing investments or withdrawing funds altogether. Investments usually span over a long period of time, so it’s best not to make potentially harmful decisions based on short-term market performance. If you’re opting for a low-risk investment, you won’t need to check it often. It’s recommended to monitor your investments every three months just to see how they’re doing.

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If you’re interested in finding out more about how you could invest your money wisely, we’re here to help.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

Past Performance is not a guide to future performance and should not be relied upon.

Approved by The Openwork Partnership on 30/06/2023