10 Money Myths About Investments that Canadians Still Believe

Wisebread says that the days of investment brokers only being interested if you’re willing to invest thousands of dollars are long gone. Anybody can invest, even if it’s just in one share. In fact, investing small amounts regularly can yield good returns over time. There are different ways to invest $100 and grow it to $1,000.

Of course, if you invest in stocks that rapidly grow in value, you can sell them at a huge profit and make quick money. However, as the Financial Express points out, the stock market really rewards long-term investors. In essence, the system transfers money from those who are greedy or fearful to those who are patient, rational, disciplined and calm.

As Zoomer says, investing for the long term is good advice when you’re young, since not starting early enough and not investing are just two of the signs you’ll retire broke. As you get older, though, you can’t afford losing lots of money through bad investments because you have less time to recuperate from financial losses. So, as you get older, you need to make wiser, safer investments that can yield better returns in the short term.

Knowing a bit about finance and investment and doing your research before investing will surely help, but you don’t need to be an expert to invest. As Global Banking and Finance says, to invest in a mutual fund, you need to do your research and know how to find the best mutual funds in Canada, but mutual funds also come with fund managers who can help you with the details.

The Financial Express says that if you’re investing in what is hot right now, you’re just following the crowd. The problem with this approach is that you’ll get exactly what the rest is getting, and nothing more than that. To make the best investments, you need to be cautious when others are greedy, and greedy when they are cautious.

While investment analysts can provide useful information for making investment decisions, MoneyWise says that you need to treat their price targets with caution. Their predictions aren’t always right and the chances of their being wrong are even greater when they make predictions about what will happen far into the future. It will help you to brush up on the financial terms most Canadians don’t know but should, so that you can tell more easily whether you should trust your broker’s advice.

Investing can be risky and if you take on greater risks, you can indeed make lots of money. However, as the MoneyWise says, over the long term it can be more lucrative to invest in the more boring, safer shares. The key is to buy shares in companies that are stable and have predictable returns and to hold on to these shares.

Putting all your investment eggs in one basket is seldom a good idea if you want to retire with millions. However, diversifying too much isn’t the answer. If you have too many different investments, it might become too hard to keep track of them. Also, as MoneyWise says, you run the risk of not doing enough research before investing.

Buying during an IPO, or initial public offering, can seem like a great idea. You want to get in before everyone else, after all. However, as Wisebread says, many companies have seen their share prices drop to well below IPO levels. For long-term investments, it makes more sense to be prudent and wait to see how the company performs after the IPO, before investing in it.

Zoomer says that if a stock yields more than seven or eight percent, it means that investors don’t believe the payout is sustainable. Unusually high returns are one of the danger signs for the investment market. Instead of investing in the company that offers the highest return on your investment, you need to focus on stocks in companies that are likely to sustain their payouts even in a poor economic climate.