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19 Jul 2021

What investing is NOT | Pauline Teo

Investing Myths | Pauline Teo
(c) Sadie Xiao


We don’t do something because of what we’ve been taught, no matter how crazy or irrational they are. From the thousands of people I meet, hundreds hold preconceived notions about investing; hence, don’t want to take action. In the end, not finding out whether what they’re taught was true became their loss.

I have been investing for more than a decade already, and believe me when I tell you that there are a lot of hearsays, or in today’s popular language “fake news,” about stock investments that I wish more people would correct.

In this article, I’ll be discussing the most common investing myths I hear and why they are purely misconceptions.

1. Investing is gambling

Investing is not gambling. Gambling is mostly about luck and is short-lived. When you gamble, you cross your fingers that the odds will be in your favour. It’s either you go home a winner or a loser. But just think about how casinos earn huge profits. In case you don’t know it yet, casinos make money from you. The man at the machine will always have an advantage against you, no matter how much “luck” you brought.

Investing also requires luck. But it’s not the typical luck you wish you have. Luck stands for “labour under correct knowledge.”

In investing, you need to put in the effort and study the stocks you want to invest in. It’s not a guessing game, but rather of proper knowledge and evaluation. When done right, investing can give you a stable passive income you would’ve just dreamt of if you gamble your money away.

More importantly, investing is not about becoming rich overnight. It's bound for long-term goals. You invest in a stock today and wait for your investment to grow, for the company to make profits, and for you to get returns.

2. Investing is only for finance experts

This is what mostly holds people back. But what we all need to realise is that investing is not all about math or numbers. Anybody can do investing – young or old, male or female, housewife or career woman, entrepreneur or employee.

Math is not at all a tough requirement. Yes, you’ll need basic math skills but you’re not required to memorise formulas and compute large numbers. In today’s world, we’re lucky to have access to innovative technologies that make stock analysis easier.

In my case, I use the VI app. I also am not too adept at numbers, but with this app, I can see whether a stock is worth investing in or not in just 5 minutes.

3. Investing is only for the rich

I don’t get the logic why people would think that investing is only for those with huge capital. We invest because we want to be rich, right? When the rich invest their money, they get richer. When the average man in the street, like you and me, invest, we can get rich.

I also know that most people think they need a lot of money to start investing in stocks. This is not at all true. In fact, we, at VI College, believe you can start with just $10 per day. I can tell you more about this in my free weekly masterclass.

Register for my FREE masterclass on value investing

4. Investing is about timing the market

We can never time the market. We know that the market goes up or down, but we can never tell when and for how long.

Some people think that success in investing is for those who can tell when the market will go bullish, but market dynamics cannot be predicted. This is why we always tell our graduates to diversify their portfolios and review their stock investments every once in a while.

5. Investing takes a lot of time

“I don’t have the time to invest” is a statement I’ve heard more than a thousand times. Guess what, investing doesn’t require you to spend half of your day or your entire weeknight poring over stocks. We don’t sit in front of the computer for hours staring at the price movements every morning until lunch waiting to buy or sell.

Investing is buying a stock you believe to be valuable and holding on to it as it grows. This is why I promote value investing. Not only does it allow you to have time for yourself and your family, but it also allows you to sleep soundly at night not stressing about what your portfolio could look like when you wake up.

From its root word “invest,” investing is about you being “committed to achieving a financial return” or “involved or engaged especially emotionally.” It’s not a one-time thing. When you commit, you put underlying trust. You don’t have to sit by it every single day. Rather, you trust your judgment that it’ll give you returns in the long run.

I hope I debunked the incorrect perceptions you have about investing. Hopefully, I’ll see you as an investor soon. Feel free to send me questions at the VI Bubble or attend my masterclass.

~ Pauline Teo



Disclaimer

No income guarantee or promises of any type are being made in this article. Know that your results will vary due to circumstances that are outside of our control. The author and the company do not warrant, guarantee, or make any representations about the use or results of the use of the products, programmes, services, and resources mentioned in this article. The reader, thus, agrees that the author and the company are not responsible for the success or failure of readers’ investment and business decisions relating to any information provided herewith.