Common Investment Myths – And How to Break Them

 

 

Let’s talk about investment myths. Have you started investing yet? If the answer is yes, think about the last time you sat down with a financial advisor and reviewed your portfolio to ensure your investment strategy is still aligned with your goals. If the answer is no, ask yourself why not? Maybe it’s because you don’t think you can afford it,  maybe it’s because you’re afraid of the risk versus reward or maybe it’s because you don’t see the value in paying fees.

 

Here’s the good news, today I’m debunking common investment myths. Actually, I’m going to shatter them. Whatever the reason may be that’s holding you back from reaching your full investment potential, it all ends now. If you’re hesitant about seeking financial advice, investing in the market and exploring different investment options, don’t worry because other people are too – that’s why there are so many common investment myths.

 

The key is to tell the truth about the current state of investing and help Canadians implement an investment strategy that you’re comfortable with.

Here are the real answers to three common investment myths:

 

I can’t afford to invest

 

Yes, you can. Everyone, whether you’re 16 or 56 can afford to put a portion of your after-tax income towards investing. The percentage varies depending on your monthly household expenses and individual disposable income, but yes everyone can afford to invest. So often people feel that saving investing are just for the wealthy – and that’s just not true.

 

I don’t need professional advice

 

Oh yes you do, everyone does. Why? Because there is so much more to creating an investment strategy than choosing the right stock at the right time – and I don’t do that because that’s not what smart investing is about.

 

The truth is investing is about finding solutions that align with your short term and long-term goals as well as your risk tolerance and time horizon. The Manulife investment philosophy is “There’s a difference between access to investments and investing successfully. Managing money wisely is a full-time job which takes experts with significant experience and skill.”

 

On a side note, timing the market to buy in on the absolute lowest day of the year and selling on the absolute highest day of the year to gain the maximum profit is another common investment myth. That doesn’t happen.

 

I shouldn’t have to pay fees

 

Well yes you should. In life we all have to pay for a professional service. I can’t think of a scenario where you get a service for free – except for the library. If you want the best dentist then you have to pay for it. The exact same principal is true when it comes to investing.

 

Of course, you can open a self-directed online brokerage account and manage your own money, but do you have the years of experience and professional expertise of a financial advisor? This is the real reason why paying for a professional service is worth the cost. It’s about access to investments (because you could do that yourself online) it’s about the experience and the expertise.

 

I hope this helps overcome some of your hesitations when it comes to building a relationship with a financial advisor and creating an investment strategy that fits your individual needs. If you want to discuss other common investment myths then let’s chat.

 

*This content was originally created by Manulife Securities for information purposes only. It has been distributed for advisor publication.*

3 Investment Tips for Millennials

 

 

Let’s be honest, investing isn’t always easy – at least it doesn’t always seem that way. With so many different options available on the market (from mutual funds to stocks), choosing the best strategy can be overwhelming. That’s where the assistance of a financial advisor comes into play.

 

It’s very easy to get caught up in hot tips, news headlines and guidance from family and friends. It seems like everywhere we look someone is giving millennials investment tips. The truth is finance is personal, and that’s why it’s so important to get tailored advice from a professional. With that being said, there are some pieces of advice that all young investors should know.

 

Here are three investment tips for millennials who want to start investing:

 

Start as early as possible

 

Yes, that’s right, young people should have started investing way before they were coined as millennials. As soon as you have an income (no matter how big or small) a portion of your paycheque should go into savings.

 

Thanks to a little thing called compound interest there are big benefits for millennials who start investing early. Compound interest helps your investments grow faster because your monthly earned interest (or dividends or capital gains) is reinvested back into your account. Therefore, the next month you earn interest on the previous month’s interest and so on for years to come. It’s brilliant.

 

Think long term with your strategy

 

According to Forbes, investing for the long term helps millennials see the bigger picture when it comes to risk versus reward in your portfolio. “Risk is kind of like that friend who regularly cancels plans but always comes through in a pinch. There might be heartache in the day-to-day, but in the long run, you’ll be glad you stuck it out.

In investing, more risk means the potential for more reward. Could you lose money and never collect that premium? Sure, but that’s unlikely when you’re in it for the long-term.”

 

Be honest with your financial advisor

 

Professional advice can help find an investment strategy that fits your individual plan, financial capabilities and life goals. However, that can only happen if you are completely honest with your advisor.

 

Think of a financial advisor as your financial doctor, they can’t totally assess the situation and provide a recommendation until they have all the information. This includes your short term and long-term goals, tolerance for risk, time horizon and general knowledge of the investing world.

 

If you have questions about investing or want to start investing but don’t know where to begin, I’m happy to help. Let’s chat about your goals and investment options for millennials.

 

*This content was originally created by Manulife Securities for information purposes only. It has been distributed for advisor publication.*