You have finally saved enough money and this time, you feel confident that you are ready to embark on your journey as an investor.
But before you even shell out your hard-earned cash, it is important to remember that you should never grab the first opportunity to invest that comes your way.
After all, investments are not about having more savings to jump in. Instead, it is more about looking for something you understand and love to buy and hold.
But of course, no one can blame you if there are things you expect out of investing. Below are 5 expectations that you might have when you are just starting out as an investor.
1st Expectation: Investing is Just Like Gambling
This is probably the first and most common expectation among new investors. While most investment methods that many investors turn to are undoubtedly similar to gambling, the truth is that there are lots of ways and methods to lower your risks when investing.
Also, remember that if you randomly choose a stock without any research and an actual decision-making process, your investments will surely turn into a gamble.
2nd Expectation: Investing Means You No Longer Need to Work
This second expectation is also quite common but in reality, investing will let you enjoy a happy and comfortable retirement, and not necessarily eliminate the need for you to work your 9 to 5 job. You also shouldn’t expect to earn enough retirement money in just a few days.
But as long as you stick to the right approach, you can definitely retire wealthier and younger which wouldn’t have been possible with your regular job. However, you shouldn’t just quit your job right on the day you begin investing, either.
3rd Expectation: Investing Can Make You Rich Overnight
Now, this one goes hand in hand with the earlier expectation. While it is true that investing can make you unbelievably wealthy, chances are it won’t just happen overnight. Although you have probably heard of investors who struck a goldmine with their investments, these stories are great but are very rare.
A long-term and more forward-thinking approach is a must instead of expecting to earn a fortune out of your investment in just a matter of years, months, or days.
4th Expectation: You Need to Buy Indexes Because the Market Will Definitely Go Up
Index investing will actually leave you more open to stock market crashes and periods with no gains at all. This is why it will be a much safer strategy to keep a close eye on the market and buy individual companies on sale and meant to endure crashes.
5th Expectation: Stocks Bought on Sale Will Always Go Up
This last expectation doesn’t happen with all companies, unfortunately. It will just be this way if the company is wonderful enough. While a good company will almost always attain its true value, getting there might require a thrilling roller coaster ride.
This article isn’t meant to burst your bubble. But facing the reality would definitely be better than ending up disappointed, right?