Envision Financial

8 Investment Myths You Can Kiss Goodbye

Everybody wants to make their money work for them.

We all hope that by the time we reach retirement, we’ve had enough wins to be able to enjoy our senior years without having to fret too much about our finances.

The problem is there are a lot of myths about investment out there that can make it hard for beginner and seasoned investors alike to make smart decisions with their money.

Investing does not have to be scary. You don’t have to go in it blindly.

By understanding some key principles and recognizing some of the popular myths, you can have the tools to make strategic decisions that will make your money grow for you.

“Past investment wins and losses will predict my future returns.”

In the unpredictable world of investing, it's natural to look for options that have performed well, and to want to make decisions based on successful trends.

But the truth is that investing based on past performance is like driving by looking through your rear-view window. Asset classes perform in cycles, which means that something that works well today might not be as successful tomorrow, next week, in a month or a year.

Instead of trying to predict the future, we recommend you diversify, re-balance and stay the course. Give your portfolio many opportunities to perform well.

QUICK TIP:
Really eager to try and time the market? Use a small piece of your portfolio to experiment with.

“I’ll make fast money if I borrow to invest.”

There are cases when borrowing money to invest (also called “leveraging”) makes sense, but it’s not a guaranteed windfall.

Many people are excited by the idea of boosting their gains (and by the potential to produce tax deductible income), but they fail to realize that the increased risk coupled with the debt of leveraging could easily go the other way and write-off their investment.

If you think that you can pay down this "good debt" at a lower rate than your return, talk to an experienced advisor about your options and potential outcomes.

“I need a large sum to start investing.”

As an investor, time is your greatest ally – as long as you don’t waste it.

Since most people don’t have a sizeable amount to start with, many products are created to build small sums into the lifestyle or retirement you desire, over time.

No matter what your budget is right now, we recommend you contribute as much as you can afford each month by paying yourself first. And use those opportunities like bonuses, gifts, and raises at work to boost your investment results.

“Investing is way too risky for me.”

There may be more risk to your financial future if you choose not to invest.

Because of inflation, the cost of goods rises every year, and over time that change can be significant. A person buying milk for $5.00 today will pay over $10 for that same litre in twenty years based on the average trend of food inflation.

That’s why your real risk might be outliving your money. Investing is really just about helping yourself save money, and build your wealth.

You can choose how much risk you want to assume, and there are products like bonds, mutual funds, and term deposits that you can use to balance more aggressive investments.

To strike the right balance, we suggest talking to your financial planner about your risk tolerance, future needs, and the variety of options you can choose from.

“I’m not good enough with numbers to be an investor.”

Put away the scientific calculator app. With a grasp of some basic math you can make investment decisions and understand your results.

A good financial advisor will make sure you’re clear about how each option can add up, and won’t mind if you ask questions.

Start by focusing on just two types of numbers within your financial plan: the amount you want to reach, and the date by which you want to achieve your goal.

“Socially-responsible investing sacrifices returns.”

You don’t have to give up making a good return in order to use your money in ways that benefit the environment and society.

And the statistics prove this is the case. The Canadian Jantzi Social Index shows that socially responsible investments deliver returns that are equal to, or greater than, traditional investments.

Fees are comparable to conventional mutual funds, so you can go ahead and make investments that positively impact the world while growing your money.

“$1 million is the magic number.”

No longer does being a millionaire mean that you’re set for life.

Thanks to inflation and longer life expectancies, you may need to save more money than you expected in order to spend a comfortable 25 to 30 years in retirement.

And think about how you value and use your assets. You may have property worth a million dollars, but it’s awfully hard to carve-off a bedroom to pay for groceries.

If you’re unsure how much money you’ll need in retirement, there is a financial expert at any of our branches who can help you sort things out and create a simple plan.

“I have to figure it out alone.”

You shouldn’t expect yourself to have to figure this out alone or, worse, with only the help of the Internet. At Envision Financial, our financial experts are here to help you make sense of your financial future. Our expertise and our resources are fully available to you so you can be equipped to make the best possible decisions for your financial future.

So find a branch near you or make an appointment and come in for a quick chat. We’ll get you started with a personal investment plan. Together, we’ll come up with a plan to make sure you are on track so you can reach your goals and not have to fret about getting your finances under control.

We are here to help keep it simple.

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Whether you’re looking for more information, or you’d like to let us know how we can serve you, you’ll find our contact information here.

We encourage you to visit an investment advisor at any of our branches for more advice on how to reach your goals!