The most common myths about investments

The investment market is surrounded by myths even more tightly than stocks are by candlestick charts. Behind the external simplicity lies a complex system of strategies, calculations, and analysis, which is often replaced by rumors and legends. These distortions mislead both beginners and practicing investors. Debunking the most common myths about investments is an important step towards building a conscious, stable, and profitable strategy.

Investment mythology not only hinders getting started but also shapes unprofitable decisions. Analyzing the most enduring misconceptions can help move beyond naive beliefs, learn to assess real risks, and choose effective strategies.

Investing Is Only for the Wealthy

Myths about investments often start with the idea that only owners of six-figure accounts can afford to enter the market. In practice, investments for beginners have long gone beyond the elite. For example, since 2023, the broker “Tinkoff Investments” has allowed opening Individual Investment Accounts (IIA) with deposits starting from 1000 rubles. Financial platforms like “Finam,” “VTB My Investments,” and “SberInvestor” offer ready-made portfolios starting from 10,000 rubles with monthly top-ups from 500.

You don’t need millions in capital to create a working portfolio—clear goals, discipline, and understanding of strategies are enough. Exchange-traded funds (ETFs), low-entry stocks, “people’s bonds” OFZ-n with a minimum purchase of 1000 rubles—access to the stock market is open not by wealth but by awareness.

The Higher the Risk, the Higher the Return: Basic Investment Myth

The next enduring stereotype: high risk always brings high profits. However, this principle does not work in its pure form. Investment risks should not be confused with gambling. If a trader buys little-known tokens without analysis or invests everything in one startup—it’s a lottery, not an investment.

From 2022 to 2024, the Nasdaq platform showed an average annual growth return of 10–12% for the stocks of technology giants (Apple, Nvidia, Microsoft) with moderate volatility. At the same time, many “hot” IPOs promising 300% growth in the first six months ended up with losses of 70–90%.

Financial literacy involves not seeking maximum risk but working on how to minimize risks in investing through diversification, lot management, choosing instruments with predictable returns—such as federal loan bonds, S&P 500 index ETFs, real estate REIT funds.

Investing Is Difficult

The belief that is actively fueled by fear of terms and charts. However, platforms like “BCS World of Investments” and “Alfa Investments” have introduced step-by-step tips, auto-portfolio adjustments, and even voice assistants.

Investments for beginners today look like choosing one of three buttons: “conservative portfolio,” “balanced,” or “aggressive.” The application selects stocks, bonds, currencies, and allocates shares on its own. All the user needs to do is be regular and monitor.

Furthermore, debunking investment myths, it is worth mentioning that Telegram bots like @Richbot and YouTube channels such as “Financial Independence” or “Investment Point” provide simplified learning formats. Starting to invest from scratch has become easier than opening a bank deposit. It all comes down to choosing a broker, registering, and transferring a minimum amount.

Success Comes Instantly

One of the most harmful investment myths is expecting quick profits. In reality, income is generated through compound interest, that is, through reinvesting income. For example, if an investor invests 50,000 rubles in an ETF on the Moscow Exchange index at 12% annual interest, then over 10 years with a monthly top-up of 5000 rubles, the portfolio will reach almost 1,200,000 rubles. But if the top-ups stop and the income is withdrawn after 2–3 years, the growth will stop.

Investing is a marathon, not a sprint. Even stock market gurus like Warren Buffett built capital over decades by investing in stable companies—Coca-Cola, American Express, Wells Fargo—with steady dividend income and price growth.

Investments Require a Lot of Time

A real investor does not spend 6 hours a day on charts. Thanks to automation, most actions are passive. Robo-advisors in “Tinkoff Investments” or “Sberbank” allow the investor to set parameters once, and the system autonomously allocates assets, rebalances the portfolio, and notifies of downturns.

Investments require 15–30 minutes a week—enough for news analysis, checking indicators, possible rebalancing. The main time is spent on developing a strategy and choosing instruments. For example, the “lazy investor” strategy involves buying ETFs once a month and annual share adjustments.

Trading and Investing Are the Same: Common Myth

Investments are often confused with trading—buying and selling assets within a day. The process requires instant reaction, technical analysis, and daily involvement. Investing, on the other hand, relies on fundamental analysis, growth forecasts for companies, and assessment of financial stability.

An investor holds stocks for years, receiving dividends, while a trader closes a position within an hour. For example, the Berkshire Hathaway fund has held positions in Apple since 2016, while a trader can buy and sell the same securities 10 times a day without receiving a cent in dividends.

All Assets Are Stocks

Myths about investments often narrow the concept of “instruments” down to stocks. However, the market offers dozens of options: corporate bonds (e.g., PIK and MTS with a coupon of 11–13%), federal bonds (OFZ-PD with semi-annual payments), ETFs, crypto funds, gold, real estate, derivatives.

For beginners, it is more advantageous to start not with stocks but with bonds and funds: lower risks, predictable yield concept. Real estate investments also provide passive income—buying an apartment in Moscow with a rent rate of 60,000 rubles/month achieves payback in 12–14 years without considering price growth.

A Broker Is the Investor’s Enemy

Another popular investment myth is the belief that a broker profits from the client’s losses. In practice, the specialist earns profits from turnover commissions and is more interested in keeping the client in the system as long as possible. The largest brokers in Russia—Tinkoff, Sberbank, VTB, Opening—use asset protection at the Central Bank level, a system of insurance up to 1.4 million rubles in the account, offer transparent pricing and reports. Moreover, the transaction fee ranges from 0.03% to 0.1%, making participation even with minimal capital justified.

Only Dividends Bring Income

Even profitable companies do not always pay dividends. For example, Amazon and Tesla did not pay a dollar in dividends until 2024, yet their stocks grew by tens of percent annually. An investor receives income not only from payouts but also from asset value growth. Investments in bonds bring coupons, stocks bring dividends and growth, real estate brings rent. Each instrument realizes income in its own way. The investment strategy should consider goals—from passive income to capital growth.

How to start investing and avoid misconceptions:

1. Open a brokerage account in a licensed company with a rating not lower than “A” according to NAUFOR data.
2. Choose a strategy: passive investing through ETFs or a diversified portfolio of bonds, stocks, real estate.
3. Calculate the financial goal: for example, accumulate 2 million rubles in 10 years with a 10% annual return with a monthly contribution of 10,000.
4. Analyze the risk level and choose appropriate instruments: from federal bonds to growth stocks.
5. Monitor asset allocation, do not panic during downturns, keep an investment diary.
6. Check the results once a quarter, rebalance, and adjust the plan.
7. Constantly educate yourself: read company reports, attend courses, study analytics platforms like “InvestHeroes” or “TradingView.”

Rationality Is the Only Antidote

Investment myths distort perception and lead to mistakes. Stereotypes, like the necessity of wealth or instant profit, replace the essence—discipline, planning, and sober analysis. Investments for beginners require not a million in the account but a millimeter of common sense. The market offers tools for any goal: from bonds to REITs, from IIAs to growth stocks. A clear plan, risk understanding, and continuous learning turn investments into a powerful capital-building mechanism, not a casino with pretty pictures.