VI Blog

5 Investing Myths You Must Forget

19 Jul 2021

Investing Myths | Pauline Teo
(c) Sadie Xiao

Isn't it ironic that despite the vast information now available to us, we still choose to believe in investing myths? Fair enough, some of us are not aware of which is reliable information and which is not.

Of the thousands of people I meet, hundreds hold preconceived notions about investing; hence, don’t want to take action. In the end, not finding out whether what they know was true became their loss.

I have been investing for more than a decade, and believe me when I tell you that there are a lot of hearsays, or in today’s popular language “fake news,” about stock investments that I wish more people would correct.

In this article, I’ll be discussing the most common investing myths I hear and why they are purely misconceptions.

Investing Myth #1: Investing is gambling

Investing is NOT gambling. Gambling is mostly about luck and is short-lived. When you gamble, you cross your fingers that the odds will be in your favour.

It’s either you go home a winner or a loser -- just like when you play the lottery; you pray you'll get that one-in-a-million chance to win the jackpot.

Or think about how casinos earn huge profits. In case you don’t know it yet, casinos make money from you. The man at the machine will always have an advantage against you, no matter how much “luck” you brought.

Investing may also require luck. But it’s not the typical luck we know.

I always like to tell people that luck in investing stands for “Labour Under Correct Knowledge.”

In investing, you need to put in the effort and study the stocks you want to invest in. It’s not a guessing game, but rather proper knowledge and evaluation. When done right, investing can give you a stable passive income you would’ve just dreamt of if you gamble your money away.

More importantly, investing is not about becoming rich overnight. It's bound for long-term goals. You invest in a stock today and wait for your investment to grow, for the company to make profits, and for you to get returns.

Investing Myth #2: Investing is only for finance experts

This is what mostly holds people back, thinking that they must have a background in finance before they can invest their money. Trust me, investing is for everyone – young or old, male or female, housewife or career woman, entrepreneur or employee.

Math is not at all a tough requirement. Yes, you’ll need basic math skills, of course, but you don't need to memorise formulas and compute large numbers. In today’s world, we’re lucky to have access to innovative technologies that make stock analysis easier.

In my case, I use the VI App. I also am not too adept at numbers, but with this app, I can see whether a stock is worth investing in or not in just 5 minutes.

You see, I can invest and get huge returns even though I am not an accountant or someone with a professional background in the finance industry (my degree in university is in hospitality management). So what I want to say is this: Go do it! This myth is only an excuse used by those who are scared to start. But if you don't decide to take the first step today, when will you be able to see your money growing?

Investing Myth #3: Investing is only for the rich

I don’t get the logic why people would think that investing is only for those with huge capital. We invest because we want to be rich, right? When the rich invest their money, they get richer. When the average man in the street, like you and me, invest, we can get rich.

I also know that most people think they need a lot of money to start investing in stocks. This is not at all true. In fact, we, at VI College, believe you can start with just $10 per day. I can tell you more about this in my free weekly masterclass.

Investing Myth #4: Investing is about timing the market

Another misconception about investing, especially in stocks, is the need to time the market. I admit I was one of those who believed this -- but that was before I got sufficient knowledge about how investments work.

You might be discouraged to start investing as you feel the market is too unstable. Well, it is actually. But I learnt that market volatility is a given, yet can be managed.

Timing the market is not the way to go. We can never accurately time the market, when it will go up or down and for how long. But we can invest in companies that are able to stand market corrections. We can invest our money into shares that will continue to give us dividends in a bear market.

Some people think that success in investing is for those who can tell when the market will go bullish, but market dynamics cannot be predicted. This is why we always tell our graduates to diversify their portfolios and review their stock investments every once in a while.

Investing Myth #5: Investing takes a lot of time

“I don’t have the time to invest” is a statement I’ve heard more than a thousand times. Guess what, investing doesn’t require you to spend half of your day or your entire weeknight poring over stocks. We don’t sit in front of the computer for hours staring at the price movements every morning until lunch waiting to buy or sell.

Investing is buying a stock you believe to be valuable and holding on to it as it grows. This is why I promote value investing. Not only does it allow you to have time for yourself and your family, but it also allows you to sleep soundly at night not stressing about what your portfolio could look like when you wake up.

From its root word “invest,” investing is about you being “committed to achieving a financial return” or “involved or engaged especially emotionally.”

It’s not a one-time thing. When you commit, you put underlying trust. You don’t have to sit by it every single day. Rather, you trust your judgment that it’ll give you returns in the long run.

It's time to forget all these investing myths. And hopefully, I’ll see you as an investor soon. Feel free to attend my free masterclass and learn more!

~ Pauline Teo


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