New to Investing? Don’t Buy Into These 4 Myths

One of the biggest challenges facing new investors is getting started in the first place. For , putting your money into a stock, mutual fund, bond or other asset can be daunting. You might be wary of the risk, or think the process is too difficult, or believe you don’t have the expertise to be successful.

While those are legitimate concerns, they can be easily overcome when you develop the right investment plan. A good first step is to learn how to separate fact from fiction. Here are four myths about investing you should not buy into as a .



Earning passive income doesn't need to be difficult. There is always an element of risk when it comes to investing — especially when it involves stocks. The never go in a straight line, which means they are constantly moving higher or lower based on a variety of factors.

You will lose money some days (and years) and earn it back during other periods. But one thing to keep in mind is that historically, stock markets have always trended higher over the long term. The — a key market index comprised of 500 large companies — has gained an average of about 10.

5% a year since its introduction in 1957, Business Insider reported. There have been some wild swings over that time — even in this decade, when the S&P 500 rose 26.3% in 2023 after falling 18.

1% the previous year. The best way to look at investing is as a long-term strategy. Don’t focus on daily or weekly volatility.

Instead, think several years ahead. You’ll learn that the bigger risk is not investing in the stock market. You could end up leaving money on the table if you just park it in a lower-earning year after year.

This is another popular myth that keeps many potential investors on the sidelines. One thing to remember is that there’s no single template for investing. You can simplify things by putting your money into mutual funds that are managed by professional investors.

Another option is an , or ETF, which typically is a passively managed fund designed to mirror the performance of indices such as the S&P 500. To keep things simple at a lower cost, you can use a , which is a computer program that recommends an investment strategy based on your specific financial situation. Fees for a robo advisor are typically lower than fees for using a human financial advisor.

Speaking of fees — you will face them if you hire advisors to recommend or manage investments. But there are wide variations in the you’ll have to pay, and how much. For one thing, you don’t have to hire a professional.

You can invest online for low or no fees, though you want to make sure you have researched your investments before putting your money into them. You can also use a robo advisor or invest in a , which is an investment mix that changes according to your age and years from retirement. Even when you hire a brokerage, there are big differences in the brokerage fees they charge.

You can save a lot of money by choosing the most affordable options. This might have been the case a few decades ago, but today you can get started investing with only a few dollars, according to Fidelity. The combination of competition and technological advances has greatly lowered the cost of entry for investors.

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