You may have a lot of wrong ideas about investing.
I used to be like you.
So what did I do?
I educated myself by reading books, researching online, and attending numerous seminars about investing.
With the help of Philam Asset Management or PAMI and Philam Life, we are going to debunk some investing myths that may have clouded your financial smarts today.
9 Investing Myths Debunked: Myth # 1
Investing in the stock market is basically just gambling.
According to Dictionary.com, gambling is (1)
When gambling, you have no idea if your bet will win or lose.
With investing, as long as you will follow your short or long-term plan and continue your financial strategy, you will reap the benefits in the long run.
9 Investing Myths Debunked: Myth # 2
When the stock market goes down, cut loss right away.
“Understandably, many people believe that when the stock market goes down, that’s when emotions kick in — either they panic and sell because of fear or they hold on to a bad stock with a false hope that it will go back up again,” shared Marvin Germo, Registered Financial Planner.
“It normally shocks people when I tell them that if they are financially liquid they should do the opposite and look for quality stocks that are cheaper. Just imagine if it were gasoline and price drops to Php 10 a liter, wouldn’t you fill up your tank?”
“Instead of panicking when stock prices go down, your best bet is to follow your plan, continue with your strategy, and select stocks that have great value with the potential to move even higher. The bottom line is that all stocks go down, but the good ones bounce back after falling. Prices will recover over time,” enthused Germo.
9 Investing Myths Debunked: Myth # 3
What works for others will definitely work for me.
We have different goals in life and what worked for you may not probably work for me.
“The farther you are from your goal, the more aggressive you should be,” Germo explained.
9 Investing Myths Debunked: Myth # 4
There’s a best time to invest.
The best time to invest in the stock market is not yesterday and tomorrow.
“Indeed, it’s time in the market and not timing the market, that’s important,” noted Ferdinand Berba, PAMI President and CEO.
9 Investing Myths Debunked: Myth # 5
It takes money to make more money.
You just need to be consistent.
For example, if you invested Php 5,000 on the stock market, you don’t necessarily have to invest the same amount the next month.
You can allocate Php 1,000 from your salary every month until you will hit your goal in the years to come!
9 Investing Myths Debunked: Myth # 6
Investing will make you rich right away.
“I wish I could tell you that investing will make you rich overnight, but keep in mind that what’s easily gained is easily lost. The main strength of investing in the market is to build wealth over time,” Berba emphasized.
9 Investing Myths Debunked: Myth # 7
I’m young and single. I don’t need life insurance yet.
“It’s a common thought that investing in insurance is only meant for those who are married and with children. In fact, investing while you’re young is ideal. Despite feeling like you’re invincible at that age, life is full of uncertainties. It’s more ideal to be prepared,” said Rolan Enriquez, Philam Life Director of Agencies for Visayas and Mindanao.
9 Investing Myths Debunked: Myth # 8
The insured never benefits from the insurance.
Life insurance is not just death insurance.
Life insurance nowadays is a combination of protection and investment.
“This is especially true when your insurance has an investment that is linked to mutual funds. Unit-linked plans allow you to maximizeyour money’s growth potential and to be prepared for life’s uncertainties at the same time. Philam Life financial advisors will be able to help you accurately identify and address your needs in terms of protection, health, savings, and investments,” Enriquez concluded.
9 Investing Myths Debunked: Myth # 9
With online technology, I don’t need a financial advisor.
Why we need financial advisors:
- They can customize our financial plan.
- They can recommend product solutions.
- They can give you a personalized service.
- They are well-trained and they have acquired expertise.
“9 Investing Myths Debunked” is my 1st entry for Day 13 of The CBC 30 Day Blogging Challenge (#iBlogForCBC, #iBlogForCebu, #CBClevelUP, #30DayBloggingChallenge).