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5 Investment Myths To Avoid As An Early Investor


As a new investor there are chances of misunderstanding a certain financial product and due to less understanding, one may end-up having some pre-conceived notions.

Before one starts investing one has to clear on the basic concept of investing, the types, risk and returns. Deep knowledge on the financial product will help you in making a wise decision. On the other side, believing a myth and investing can be a costly affair.

5 Investment Myths To Avoid As An Early Investor

Here are 5 investment myths to avoid:

Myth 1: Not Buying Health Insurance Apart From Company Policy

Many individuals fail to buy health insurance even if the cover provided by the company is not sufficient. One needs to check how much amount is needed and family members to be covered by the policy. Having just a policy provided by the company may not be sufficient.

Myth 2: Investing in Fixed instrument is the best way of investing

Well, investing in fixed instrument can give you only fixed return but cannot fight inflation. One has to put the amount in various baskets depending on the age and risk.

Myth 3: Stock market/ Mutual Fund are always risky investment

Yes, but there are other avenues which one can consider such as blue chip stocks, funds which invest in debt and guaranteed instruments. SIP can be the best way to start investing in mutual funds.

Myth 4: Retirement Planning is not for young investor

It is always suggested to start planning for retirement at the earliest as one can enjoy the magic of compounding. Investing in later stages of life can make you pay a higher premium on insurance and a higher amount towards your retirement fund. Regular investment towards the retirement fund can make your retire rich.

Myth 5: Having multiple credit cards and ignoring CIBIL score

Having multiple credit cards is fine but ignoring CIBIL score can be dangerous. If you own multiple credit cards there are chances of you missing payment of credit cards which in turn can have negative impact on your cibil score



Not diversifying your financial instruments based on your need can have an impact on returns. Do not follow the crowd blindly, investments which worked for them may not necessarily work for you.

Read more about: investment investor
Story first published: Tuesday, March 15, 2016, 11:33 [IST]
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