At face value, investing can be confusing enough to the average investor, but with some widely accepted myths thrown in the mix, it can become a disaster.
With that in mind, here some very common (and harmful) investing myths debunked:
The right professional can beat the markets
Many financial advisors are happy to see this myth spread, because they want you to believe they have the skill or acumen to time the market correctly and deliver returns that no one else can. The truth is that it’s almost impossible to time the markets correctly, even for professionals.
Selling when your stocks aren’t doing well will protect you
By adding this to the investing myths debunked file, you’re far more likely to see greater long-term success. If you’re in a well-diversified portfolio, this can lead to the exact opposite of achieving your goals, because you’re essentially selling at a low. It’s natural to want to avoid perceived danger, but over a longer time-frame, the stock market has always eventually recovered from its drops and gone to reach new highs.
Every advisor is the held to the same standard
Another big misconception is that all financial advisors are held to the same legal standard. Unlike doctors, not every financial advisor has to act solely in your best interests. Legally, many advisors are held to the suitability standard, which means their advice has to be deemed “suitable” (including hidden fees, markups, etc.). Fiduciary advisors, on the other end, have to give advice solely in your best interest, which is a major investing myth you should be aware of.
Stick to the facts, not the myths
At LexION Capital, we’re fiduciary advisors who base our investment decisions on Nobel Prize-winning academic research and long-term results. Our clients benefit from a rigorous investment plan based on achieving their unique needs and goals over the long-term. If you’d like to learn more, don’t hesitate to reach out to our advisors today to start a conversation.
