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.*

6 Financial Resolutions for 2018

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The new year is a time to reflect and improve on ourselves. Many Canadians choose to make new year resolutions and financial goals are usually at the top of the list. 

 

These tips will help you set (and achieve) successful financial resolutions in 2018. 

 

Six financial resolutions to make this year:

 

1. Improve your financial literacy

 

The Canadian Financial Literacy Database helps you build an understanding of personal finance. Even if you don’t manage your own money, a basic understanding of terminology helps you better communicate your goals with a financial advisor.

 

2. Put the brakes on a big purchase

 

If you’re considering replacing an old car this year ask yourself if it can wait. If your car is paid off, the maintenance cost is likely less than payments on a new vehicle. You can use these savings to get ahead on the purchase of your dream car in the future. These principles can be applied to other big expenses like kitchen appliances or home renovations.

 

3. Practice patience with your purchases

 

To prevent overspending and impulse buying, wait a couple of weeks before making unnecessary purchases. If you wait long enough you might forget about it all together. Unfortunately, some purchases can’t be avoided. For the bigger necessary purchases, give yourself time to shop around and wait for a good deal.

 

4. Find leaks in your budget

 

Fees, impulse buying and overage charges on internet or cell phone plans are all examples of budget leaks. To fix these leaks, spend a month tracking your spending. This helps you find money you didn’t even realize was being spent. Patching up your budget leaks can help save $10s, $100s, or even $1000s this year!

 

5. Invest in your career

 

Investing in your primary source of income is a terrific way to earn more money this year. You can use Glassdoor to see if you’re getting paid fairly based on your experience and job title. You can use this information to ask for a raise or leverage it to get a better offer in a new job. To advance your career, you can also do a Google search for certificates or other learning opportunities in your industry.

 

Bring a new attitude to your money with these financial resolutions for 2018. These tips can make you smarter about your money, save more and live happier. Get in touch to find out how to make your 2018 financial goals come true.  

 

6. Build an emergency fund

 

One of the first steps towards financial independence is protecting yourself against unexpected expenses such as car repairs, home renovations and changes in employment. According to the Financial Post, only a quarter of Canadians have a rainy-day fund.

 

If an emergency happened in your life, would you need to take on debt? Talk to your financial advisor about how building an emergency fund can help avoid getting into debt.

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