Please ensure Javascript is enabled for purposes of website accessibility

Don't Let These Investing Myths Stop You From Getting Rich

By Maurie Backman - Mar 8, 2021 at 7:18AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There's way too much misinformation about investing out there. Don't buy into it.

Investing is a great way to grow your wealth. There's just one problem -- there's a lot of misinformation out there about what it takes to succeed in the stock market, and if you buy into it, you could end up losing out on far too many lucrative opportunities to count. In fact, here are three investing myths you'll want to steer clear of.

1. You shouldn't invest until you have a lot of money

It takes money to make money, but that doesn't mean you can't start by investing a little bit of money and working your way up from there. Whether you're investing in a brokerage account or retirement plan, you don't need to pump thousands of dollars into the stock market to kick off your investing career. Start off with $100 or $200 if that's all you can swing. There's a host of affordable investments you can buy for very little money, and these days, fractional shares are around to let you invest in more expensive companies as well.

Serious man at laptop

Image source: Getty Images.

2. You need to own dozens of stocks

You'll often hear that it's important to have a diverse mix of stocks in your portfolio. And that's very true. But it doesn't mean you need to own 57 different stocks to be well-diversified. As a general rule, it's a good idea to aim to own 12 different stocks from a range of market segments. But again, that doesn't need to happen right away -- if you're short on funds, you can buy a couple of stocks and build your portfolio as your finances allow.

3. You need to be an expert -- or hire one -- to do well at investing

When you're relatively new to investing, the idea of choosing your own stocks can be daunting. But it doesn't have to be -- and you certainly don't need to pay for someone else's expertise, either. As you grow more comfortable with the idea of investing, you can slowly but surely hone your stock-vetting skills and understand what metrics to look for. But until you get there, you have options -- namely, you can buy exchange-traded funds (ETFs) instead of individual stocks.

ETFs let you own a bucket of stocks without having to research each one. These funds either aim to match the performance of the broader market, or they focus on specific types of stocks (for example, large companies versus midsize companies versus small companies). You can also buy bonds ETFs -- you're not limited to stocks by any means. The great thing about ETFs is that they're investments you can truly set and forget (though it's always a good idea to check up on your portfolio every so often).

It can be tricky to get over the hump of opening a brokerage account or retirement plan and starting to invest money in it, but the one thing you shouldn't do is buy into these silly myths. All of them could get in your way of accumulating serious wealth in your lifetime.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/22/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.