What are some investing misconceptions?
There’s lots of great information available about investing in the share market, but there are also some commonly held misconceptions which may be holding you back - especially if you’re new to trading.
Timing is everything
Have you ever heard the saying that “time in the market is more important than timing the market”? It can be true. While timing is important, you should also remember that it can be very hard to predict the best time to buy shares or to pick the 'bottom of the market’ (the lowest price reached by a share, commodity, index or economic cycle in a given time period). If you do try to wait for a 'correction' (a reverse movement, usually negative, of at least 10% in a share, bond, commodity or index to adjust for an overvaluation), you could miss an opportunity if the market continues to rise.
You need a lot of money
This is not always the case. In fact, investing in shares can be a great way to build wealth because you don’t need a lot to get started. With CommSec, you can invest with as little as $500 (for new share holdings) plus brokerage, which starts from just $10.00 per trade1.
Share trading is high risk
Not necessarily. While investing does come with an element of risk, you can learn how to manage it by thoroughly researching any investments you make (for example, by looking at a company’s financials. That way, you can make informed investment choices which suit your risk tolerance. Click here for more on the risks of investing in shares.