There are a lot of so called market “experts” out there touting their ability to be able to predict trends and generate large returns on clients investment. Everyone likes to hear that their adviser is a leading industry voice and knows the market like they know their own mother. However, it’s been long known that while past market trends can be studied and applied to current conditions, they are in no way a perfect compass in predicting exactly how the market will play out.
In convincing prospective investors to part with their money, and to ultimately cover themselves, many market “experts” have taken to adopting philosophies, the outcome of which while accurate to a degree, can be largely avoided by approaching investment from a different perspective. Here are 4 misconceptions about investment that everyone should be aware of.
The Market Always Wins
What they really mean is, “Just hold on, things always go up and down, if you stay in the market and your investment will rebound.” That’s not always true. A more shocking realization is that the average investor will earn less than the average stock market return. Sometimes staying in and waiting is the wrong thing to do. Don;t keep sitting on your investment hoping it will turn around when you could be allocating your funds in more profitable ways.
Diversification is the Answer
There will always be the next Google or Apple stock that will spin off countless rags-to-riches stories. The problem is, how can you be sure what will be the next magic stock or when it will mature? You can’t. Often the solution offered is diversification. On the surface it makes sense – instead of putting all your money into one or two stocks you spread them out over thirty or more. The idea is that if some stocks go down, others will will go up. However, simply buying into a money market account (some of which allow you to partially own thousands of stocks) that has a bunch of random stocks is not the best way to invest. You don’t need a bag of random stocks, you need the right ones.
Fees are Normal
It always seems like we get nickeled and dimed for everything nowadays. If you’re using an investment broker or company to handle your assets, you can expect more of the same. Some companies charge exorbitant management and advisory fees that are simply unreasonable. There are advisers and managers out there that do not charge fees at all, but work to appreciate your investment while being paid by a third party.
Losses are Inevitable
A well-researched and diversified portfolio being managed by reputable brokers is still subject to overall market trends and external circumstances. However, the idea that losses are inevitable is simply not true, that is unless you’re doing things the same old way. There are insurance plans that are designed specifically to supplement any losses an investor might otherwise have had due to volatile markets. These plans make sure that even if the market drops, your principal and any subsequent gains remain steady.
Let Reliance Lead the Way in your Investment Future
We are experts that do things different because we think different. If you’re apprehensive about traditional investing and would like to explore better retirement investment options in San Antonio that will protect your principal while providing you with reasonable return rates – contact Reliance Retirement Services today.
Mon-Thur 9 A.M. - 5 P.M.
Fri 9 A.M. - 12 P.M.
Sat & Sun closed
San Antonio Office
6827 Camp Bullis Rd
San Antonio, TX 78256
Please send all correspondence to our San Antonio office
Proud Member of: