3 popular investing myths BUSTED

If you think one of these thoughts, read this to shake off the doubts and buy those ASX shares you've always wanted.

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Like everything in life, there are some myths that people believe about investing that are holding them back from a wealthier life.

Moomoo market strategist Jessica Amir has helpfully picked out the three most common ones and set out why they shouldn't stop you from buying stocks right now:

1. 'It's too hard'

This could be the most heard excuse for inaction, especially from those who have never bought ASX shares.

Amir argues that this might have been true in the old days when everything was done on paper through human brokers, but it's now 2024.

"Buying a share is as easy as buying groceries, whether it's a domestic stock or from overseas," she said.

"Nowadays, trading fees from brokerages like Moomoo can start from as little as $1, so there's little financial barrier to investing."

There are also plenty of free educational resources on the internet to get started, including a host of articles from The Motley Fool's Education Hub, so there's no excuse to not invest.

"So don't be afraid to take the first step — these days, it's usually a free one!"

2. 'Now isn't a good time to invest in the stock market'

We've all heard this investing myth before.

When stocks are down, the haters say this citing poor investor sentiment. When stocks are bullish, the critics say this because they think it's all too expensive.

So when is a good time to invest?

Amir reckons people are missing the point when they talk about 'good' and 'bad' times to buy shares.

"As the saying goes in the investing world, it's not about timing the market, but your time in the market.

"The best step to investing is a small one, even if it's just a hundred dollars you put towards investing into a highly diversified ETF."

Having said that, she added 2024 was looking bullish.

"The Australian and US share market are at an all-time high and there is plenty of exuberance in booming industries across the globe.

"Interest rates are easing up this year so it's likely we will see more consumer spending and investors trading, which helps support our share market."

Amir noted earnings generally declined last year.

"So it may be likely that shares will be bouncing back this year."

3. 'There's too much choice'

There is no satisfying some people. 

Would they rather that there are insufficient choices?

Amir suggests that investors don't have to complicate the situation by researching deep into microcaps.

There is nothing wrong with blue chip stocks to get started.

"The S&P/ASX 200 Index (ASX: XJO) and the S&P 500 Index (SP: .INX) are great places for new investors to start. 

"Not only are you exposed to some of the highest-performing stocks in the share market, but they are regularly managed to stimulate a profit."

Even amid the volatility last year, you would have done well with well-known large-cap names.

"If you had invested $10,000 into the S&P 500 at the start of January 2023, you would have made over $2,400 by December 2023."

Amir named iShares S&P/ASX Dividend Opp ESG Screened ETF (ASX: IHD), Russell Inv High Dividend Australian Shares ETF (ASX: RDV) and BHP Group Ltd (ASX: BHP) as some popular names to get started on the ASX.

"BHP continues to make the nation go round, supplying domestic and global products for building iron scaffolds, buildings, cars, and infrastructures.

"With a 5-year growth of 34.7%, it's no wonder it's an investment choice often made by superannuation funds, fund managers and sophisticated investors."

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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