Investment stirs economic growth and is a stimulus for the GDP. It not only benefits the investor as he gets returns or the investee who gets funds for running a business rather it helps in the development of the economy of the entire nation. No matter if the economy is going through a good or bad time but investments are definitely going to spill from one place or the other. Find out more about business and investment in Yitz Grossman blog. However, as about other important concepts like insurance and stock markets, there are a number of myths related to investments. These myths are a cause of great concern for financial experts around the globe who want them to be busted as soon as possible. Here is a list of some of the most prominent myths about investments:
1. Your focus should be finding opportunities that can prove lucrative and boost home-run investments.
New investors usually make this mistake of trying to hit high by finding opportunities that can help them earn greater returns but in doing so they also make themselves more vulnerable to lose. This is because it is widely believed that one should aim to find opportunities that are profitable which no more than a mere myth. Instead of focusing on gains, investors need to play safe by paying attention to the losses they need to prevent because losses are more devastating than gains. This can be explained with the help of an example that if you incur a loss of 20%, then you need to make a profit of 40% to get to where you started from.
2. You need to study the market more to get more returns.
One needs to have sufficient knowledge about the market in order to be able to invest in a profitable manner however this is not true that you need to study the market extensively to b able to earn greater returns. On the other hand, experience shows that expert investors buy more than study because they believe that studying the more can only waste your time and does not help in any productive way. You would be too intimidated to invest if you know about all the risks which mean you might not be able to invest at all. So it is advisable only to have a brief study of the market trends and predictions.
3. International Investment is too risky so one should ideally stay domestic.
Many believe that international investments are too risky so should be avoided as much as possible but this is not at all true. This is because of the impact of globalization where a lot of investors are willingly investing abroad. This has been induced s a result of the fact that most economic powers are facing deteriorating conditions while second-grade economies are earning power and emerging as powerful economies so in order to gain greater returns it is ideal to invest in international markets.
Thus, these three myths can surely distort your views regarding the concept o investment so you need to bust them because they cause any harm to others.