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.*

Helping your kids increase their financial literacy

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“Since I graduated from high school, not one person has asked me to find the value of X.”

 

We hear this comment all the time, and it’s generally meant as a joke, but it echoes what many think about our education system – that it’s a bit heavy on things that aren’t “real life” important, and light on things that are.

 

Take the subject of financial literacy, for example. It’s one that hasn’t received the attention many think it should. Topics that become vital in adult life – like the use of credit, or the importance of saving – are ones many students receive little guidance on in high school, until they’re forced to learn about them the hard way - through experience.

 

Fortunately, we’re seeing some provinces take action to improve this. For instance, Ontario is rolling out a pilot project to introduce a financial literacy course in 28 high schools, with hopes that a full course will be available provincewide in September 2018. Most other provinces are also making efforts to improve children’s know-how in this area.

 

But in the meantime, there are plenty of ways you can help your children become more financially literate – no matter how old they are. Here are a few links with great ideas on how to introduce your children to good financial habits

 

Canadian Living published this piece on the dos and don’ts of teaching kids about money:

 

http://www.canadianliving.com/life-and-relationships/money-and-career/article/the-dos-and-don-ts-of-teaching-your-kids-about-money

 

Here’s a great online resource created by the Manitoba Securities Commission, called “Make It Count.” It’s got a few activities and tips that help kids incorporate money management into their daily routines.

 

http://www.makeitcountonline.ca/msc/parents/

 

Finally, this page on the Investor Education Fund’s website is devoted to financial education when raising a family. There are some resources on this page with content related to teaching teenagers about financial literacy.

 

http://www.getsmarteraboutmoney.ca/en/life-events/raising-a-family/Pages/default.aspx#.WNk5_m_ytpg

 

Helping your kids learn these concepts when they’re still kids can pay significant dividends down the road. If you have any questions about any of the tips or techniques in these links, please get in touch with me any time at my direct line at (416) 571-0369. 

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