Five myths a beginner investor has to face

1. The bank wants to make me buy something

People tend to be sceptical towards investment advisors and think that the sole purpose of investment advisor is to push the consumer to buy some specific product. The only way to overcome this fear is to come and experience the consultation yourself – financial topics require eye contact and trust. No bank advisor can force the customer into anything: those days are long gone.  

2. It is a bad time to start investing right now

If you invest regularly, there is no need to worry about the starting date – you will also benefit from the bear market as the investments come at a bargain price. Seven years ago, rumours started going around about stocks being overpriced. However, if we look at the growth of stock funds over the last few years, no one can say that back then would have been the wrong time to start investing. When stock prices drop they are cheaper to acquire. 

3. If the prices drop, save what you can

Historically every fall is followed by a rise. The question is rather how fast the rise occurs and how fast we can offset the losses that may have been triggered by the price drop. If we had faced the latest global economic crisis with a 50:50 portfolio of stocks and bonds, the portfolio would have lost a quarter of its value in 2008. However, restoring its value would have taken only three years. The bottom line: if you are in the red today, don’t panic and wait for the rise that comes after the fall. 

4. Investing takes up a lot of time

It is recommended is to review the performance of the portfolio at least once per year. When investing in funds, it is sufficient to look at what is happening every now and then as the fund manager will do most of the work for you. When buying individual stocks from the stock exchange, keeping up with financial news is still inevitable unless you are a passive investor who buys a bunch of specific shares and then literally forgets about them. 

5. All of the money should be put in stocks

Risks should be mitigated by holding a portfolio of different products. Putting all of one’s available money in stocks is not recommended, even if the investor has high risk tolerance. It is also not advisable to invest all of your disposable resources, forgetting the necessary emergency buffer.