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6 Common Investing Myths (Part 2)

Everyone in investing, new or pro, is entailed by the dangers of investing. The key here is that you should know the dangers so you could avoid them.

If you missed the first three of the “6 Common Investing Myths,” you can visit this: 6 Common Investing Myths (Part 1)

Well let’s continue to the last three common myths in investing:

HQ Broker - Person Choosing a Path
A person choosing a path.

4.     Fallen Angels Will Go Back Up

Whatever the reason for this myth’s appeal, nothing is more destructive to amateur investors than thinking that a stock trading near a 52-week low is a good but.

For example, if you are looking at a+ two stocks:

X is made an all-time high last year around $100 but has since fallen to $30 per share.

Y is a smaller company but has recently gone from $10 to $20 per share.

Our question to you now is which stock would you buy? Believe it or not, all things being equal, a majority of investors choose the stock that has fallen from $100 because they believe it will eventually make it back up to those levels again.

Thinking in this way is a cardinal sin in the investing world.

5.     A Little Knowledge Is Better Than None

Knowing a little something is actually better that not knowing anything. It is crucial in the stock market that individual investors have a clear understanding of what they are doing with their money.

Investors who do their homework are the ones who succeeded in investment world.

Well, if you don’t have the time to fully understand what to do with your money, then having an advisor is not a bad thing. The cost of investing in something that you do not fully understand far outweighs the cost of using an investment advisor that could help you out.

6.     Stock Market Is an Exclusive Club For Brokers and Rich People.

Many market advisors claim to be able to call the markets’ every turn. The fact is that almost every study done on this kind of topic has proven that these claims are false.

Most market prognosticators are notoriously inaccurate; furthermore,the advent of the internet has made the market much more open to the public than ever before.

All the data and research tools that was previously available only to brokerages and robo-advisors are now available for every individuals to use.

Moreover, the discount brokerages and robo-advisors can allow investors to access the market with a minimal investment.

HQ Broker - Graph with a Watering Can
Graph with a watering can and a growing flower.

We’ll end this with a quote, “What’s obvious is obviously wrong.” This means that knowing a little will only have you following the others like an imitator. You should always do your own research and do not just rely into others words or works.

When you did you background researches you are assure to yourself that you know what you are doing and that no danger can hurt you and your investment.

You should always remember that being successful in investing takes a lot of hard work and effort – you have to put your blood and sweat into it.

Remember that making a mistake in investing can brutally injure your financial health.

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