3 Myths of Investing

Four years of investing in stocks and mutual funds may not be long but it has given me some insights which I want to share you with you.  Here are the 3 + 1 bonus myths of investing and the reality or truths based on my own investing journey.

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Photo courtesy of: www.tnooz.com

Myth 1: Investing is only for the rich.

Fact: Have you ever heard of the term “retail investor”?

According to InvestorWords, “A retail investor is an individual who purchases small amounts of securities for him/herself, as opposed to an institutional investor. They can also called individual investor or small investor.”

Source: http://www.investorwords.com/4231/retail_investor.html

In short, investing is not only for the rich but also for ordinary people like you and me.  We are actually retail investors because we may only have a small portion of money for investing.

You can open a mutual fund account, UITF account or online stockbroker platform account for as low as 5,000Php.  Minimum additional investment for mutual fund can be as low as 1,000Php.

Myth 2: Investing is complicated.

Fact: Investing need not be complicated if you use the strategy of investing using Peso Cost Averaging (PCA) and investing in investment vehicles like the pooled funds (mutual funds and UITF) that are ideal for people like me who don’t have the time nor the patience to understand and study companies, trend charts and financial statements.

For long term investors who want to get their hands dirty on the stock market, they can leverage on TRC’s SAM or COL’s stocks picks.  The only watch out is that you will need to monitor when it is time to sell the stocks and you will need to study when is the good time to buy.

TIP: COL publishes a regular “Investment Guide” where you can see the Buy Below Price (BBP) and COL FV (Fair Value, which I sometimes call Future Value ~ Target Price).

Myth 3: Investing is time-consuming with troublesome transactions.

Fact: In the olden days, you need to make a phone call to your stockbroker every time you want to execute a buy and sell transaction.

Investing in this day and age is so convenient.  You can open an online account for a stockbroker platform and do your own transaction of buy and sell.

For Mutual Fund Companies, you need to submit application forms directly to their office and some companies even require you to fill up an additional investment form for every additional investment you make.

Now with the COL Fund Source, you are able to immediately buy 24 kinds of mutual funds from 6 mutual fund companies once you have a COL account.

Bonus Myth 4: Investing is scary.

Fact: Life is scary.  Putting up a business is scary.  Getting a new job is scary.  Change is scary.  The only thing you can do is arm yourself with knowledge and education to understand the unknown.  I put this as a bonus myth as frankly, based on my own personal experience the maximum paper asset loss that I experienced was less than 20% which I said I can take and reality validated that.  But it might be a different story when the market crashes where our risk appetite will be tested.

In short,

  • Investing is for everyone, whether young or old, low/middle income people or rich people.
  • Investing is simple, although you can make it complicated if you want to with the trend charts and technical analysis.
  • Investing is so easy and convenient.

So, what about you, what’s stopping you from investing?

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