When planning investments, it is understandable that you would want to make sure your money is going into sure things.  The worst thing you can do is to throw cash at a business, watch it fail and find yourself short thousands of dollars.  However, those doing their research online may find themselves falling prey to a number of investment myths.

Anybody can post things they believe to be true on the internet.  It is not as if there is some all knowing fact checker making sure the information online is accurate.  In this article, we will be looking at common investment myths and exposing the truth to the light of day.

Myth 1:  Past Winners are Sure to Win in Future

This is one of those myths that are true but with a caveat.  You know a company to be a winner by its stock price.  Stocks are also subject to diminishing returns.  A tech giant like Microsoft or an oil company like Exxon-Mobile are safe bets, but also carry high share prices leading to reduced returns.

So, if you cannot afford those pricey investments, you need to throw that myth out the window.  Studies have shown that hedging your investment strategies on the simple fact that a stock was profitable last year is a terrible strategy.  There is no guarantee.  Remember that a high stock price is a symbol of investor confidence in the company.  If a stock was doing well last year but has dirt cheap share prices this year, it should be a signal that investors are turning and running.

The only guarantee is your investment portfolio’s performance over a long time.  Buy and hold a diverse portfolio for the long term.  You are more likely to build a profitable investment portfolio that way.

Bear Market by Mark Rain, on Flickr.  This work is licensed under a Creative Commons Attribution 2.0 Generic License.

Myth 2:  I Do Not Have Enough Capital to Start Investing

Yes, this is a very popular excuse and is singularly responsible for keeping many people from living their dreams.  Investing experts have always said that if you are waiting for the right number, you probably won’t do anything.

So, why not do the smart thing and just get started with whatever you have?  It is clear that many people underestimate the power of compounding effect.  If they understood how powerful it is, they would not wait another day.  Here’s what we’ll recommend: start investing today with whatever you have available.

Myth 3:  It’s Too Late to Start

We have often seen would-be investors who keep telling themselves that it is too late to start investing.  That they should have started when they were younger.  Unfortunately, this myth is quite pervasive.

Lots of people think this way.  Well, the one thing you should know is that it is never too late to invest.  What you might have to do, however, is raise your contributory amount every year, month, or as you see fit.

Multiple studies have already shown that as long as you do this, you’ll still successfully build a thriving investment portfolio.  Think about it this way: It is always better to invest more than less, and investing today will help you build your momentum.

Myth 4:  I’ll Have to Visit Tons of Sites to Get Accurate Information

Maybe that was the case in the past.  However, new services like InvestWall have made it ridiculously easy to get access to any information you might need at the click of a button.

These services are designed to take advantage of something called “crowd intelligence”.  Crowd intelligence is simply opinions, facts, and data from other ordinary, but well-informed investors that can be analyzed to guide investment decisions.

With access to resources like this, investors can save time while making investment decisions that are often more accurate and profitable.

Now that you have been armed with information, what is stopping you from going forward and investing?  Put your money forward and you can look forward to building a valuable portfolio.  This will give you all the money you need for that comfortable retirement in the future.