Common Investment Myths – And How to Break Them

 

 

Let’s talk about investment myths. Have you started investing yet? If the answer is yes, think about the last time you sat down with a financial advisor and reviewed your portfolio to ensure your investment strategy is still aligned with your goals. If the answer is no, ask yourself why not? Maybe it’s because you don’t think you can afford it,  maybe it’s because you’re afraid of the risk versus reward or maybe it’s because you don’t see the value in paying fees.

 

Here’s the good news, today I’m debunking common investment myths. Actually, I’m going to shatter them. Whatever the reason may be that’s holding you back from reaching your full investment potential, it all ends now. If you’re hesitant about seeking financial advice, investing in the market and exploring different investment options, don’t worry because other people are too – that’s why there are so many common investment myths.

 

The key is to tell the truth about the current state of investing and help Canadians implement an investment strategy that you’re comfortable with.

Here are the real answers to three common investment myths:

 

I can’t afford to invest

 

Yes, you can. Everyone, whether you’re 16 or 56 can afford to put a portion of your after-tax income towards investing. The percentage varies depending on your monthly household expenses and individual disposable income, but yes everyone can afford to invest. So often people feel that saving investing are just for the wealthy – and that’s just not true.

 

I don’t need professional advice

 

Oh yes you do, everyone does. Why? Because there is so much more to creating an investment strategy than choosing the right stock at the right time – and I don’t do that because that’s not what smart investing is about.

 

The truth is investing is about finding solutions that align with your short term and long-term goals as well as your risk tolerance and time horizon. The Manulife investment philosophy is “There’s a difference between access to investments and investing successfully. Managing money wisely is a full-time job which takes experts with significant experience and skill.”

 

On a side note, timing the market to buy in on the absolute lowest day of the year and selling on the absolute highest day of the year to gain the maximum profit is another common investment myth. That doesn’t happen.

 

I shouldn’t have to pay fees

 

Well yes you should. In life we all have to pay for a professional service. I can’t think of a scenario where you get a service for free – except for the library. If you want the best dentist then you have to pay for it. The exact same principal is true when it comes to investing.

 

Of course, you can open a self-directed online brokerage account and manage your own money, but do you have the years of experience and professional expertise of a financial advisor? This is the real reason why paying for a professional service is worth the cost. It’s about access to investments (because you could do that yourself online) it’s about the experience and the expertise.

 

I hope this helps overcome some of your hesitations when it comes to building a relationship with a financial advisor and creating an investment strategy that fits your individual needs. If you want to discuss other common investment myths then let’s chat.

 

*This content was originally created by Manulife Securities for information purposes only. It has been distributed for advisor publication.*

Don’t like paying taxes? Then you’ll love the TFSA!

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“In this world, nothing can be said to be certain, except death and taxes” – Benjamin Franklin

 

We’ve all heard the death-and-taxes expression before, or at least some variation of it. We chuckle at it because it’s true. Taxes are a fact of life. We mutter about it but we pay it anyway because it’s never going away.

 

So when the federal government gives us a way to pay less tax, like it did in 2008 with the introduction of the Tax-Free Savings Account (TFSA), we really need to take advantage of that opportunity. 

 

(Friendly note before we get started: If you don’t know what a TFSA is, it’s really about time you learned.)

 

The TFSA is a plan that allows you (provided you’re at least 18 years old) to contribute $5,500 to it each year. You can invest in virtually anything in your TFSA: mutual funds, stocks, segregated funds, bonds, basically anything you can hold in your RRSP. And while money you contribute to the plan isn’t tax deductible (like RRSP contributions are), all of the growth that takes place inside a TFSA is completely tax-free.

 

Where this really comes in handy is down the road – after you’re retired. When you begin to withdraw from your TFSA, all that money is yours. Unlike in other registered plans like RRIFs, LIFs or LRIFs, none of your withdrawal is taxed. What you see is quite literally what you get.

 

So don’t pass up this opportunity to enjoy some tax-free investment gains. If you haven’t contributed to a TFSA yet, you have almost $50,000 in unused room that you can take advantage of right now. Give me a call at my direct number 416 571 0369 or email me at sunil.heda@manulifesecurties.ca and let’s talk about getting you started.

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