5 Index Fund and Investing Myths

 Many of the reasons people are fearful of investing are myths.  Let us help you separate fact from fiction so you can feel confident investing. Investing Myths Don’t believe everything you hear. 1. It’s Overly Risky Too many people are not investing because they think it’s too risky. They’ll hand their money over to this thing they don’t understand and poof, X bad thing (they’re not really sure what a bad thing is, they’re just sure there are lots of them) happens and their money is wiped out. So instead, they leave it where it’s nice and safe, in a checking or savings account or stuffed under the proverbial mattress. What they don’t realize is that those things are even riskier than investing. When money is in a low yield account where it’s making less than 1% interest or under the mattress where it’s making no interest, inflation is eroding the value of that money slowly but surely. If your house burns down, the money under the mattress is ashes. Yes there are risks to investing but an investor can choose how much risk to take and there are ways to minimize risk There are places to invest money like dividend stocks or bonds that allow money to grow with limited risk. You can further reduce risk by having a properly diversified portfolio meaning your investments are spread out between different market sectors and different asset classes so if one area is doing poorly, you have other areas doing well to make up for it. And while the stock market can quickly plunge, historically it has always rebounded. In the nearly 100 years since the Great Depression, there have been fewer than two dozen losing years for the stock market. That means the best way to keep your investments safe is to be in it for the long haul, set it and forget it which is what LMM has long advocated and what investing in index funds accomplishes. You don’t put money in and pull it out based on screaming pundits or scary headlines, you don’t try to time the market. You put your money in and leave it alone. Stocks become less risky the