4 Myths Keeping You From Stock Market Success

December 17, 2018 (Investorideas.com Newswire) This might come as a surprise, but investing in stocks brings above-average return on investment. While you cannot expect to see high returns every year, stock market returns outperform most investment options over longer periods of time. Despite the numbers, millennials resist investing in stock market more than any generation before.

Comparing to half of the baby boomers and members of Generation X, only one-third of millennials trade with stocks. Among the main reasons for this are caution, lack of knowledge and funds, as well as the myths about stocks. Missing on the stock market, however, can cost millennials a lot more than they think. Let's try to prevent this by dispelling some common misconceptions.

Trading With Stocks Is Only for the Rich

Among other myths, millennials tend to believe that they would have to invest large sums in trading with stocks. While this might have been true in the past, it is no longer true today. With penny stocks, you can start trading with as little as $5. However, this doesn't mean you shouldn't be cautious, and that's where the next myth comes in.

Penny Stocks Are a Scam

Penny stocks have a bad reputation because they are alluring for scammers owing to their affordable price. But that doesn't make all penny stocks a scam, and it shouldn't stop you from giving them a try.

If you know what to look for, you can easily avoid scams. It wouldn't be wise to jump head-on into trading without preparation, though. To begin with, you need to learn how to take make money with penny stocks.

Stocks Are Too Volatile

Stocks can be volatile, but that is actually a good thing. Especially with penny stocks, you want them to be volatile, since this gives you the opportunity for making a profit. The last thing you need is investing in cheap stocks that remain stable and never move anywhere, let alone up. When you learn how to trade, you will see volatility as an asset rather than a negative.

Stocks Are a Gamble

Many millennials prefer conservative investment options, such as a saving account, but these don't typically bring high returns. NerdWallet ran a computer simulation and compared the saving account option with the stock market. It turned out that over the 40-year period, the conservative strategy could cost each millennial $3.3 million in savings. You can hardly expect that kind of money from gambling. If you know what you are doing and diversify your portfolio wisely, investing in the stock market can be one of the best investment options.

You don't have to invest large sums into trading. With penny stocks, you can literally start with but a few dollars, which is hardly a risk. What's more, you can start at no cost and practice trading with free apps first. Taking the time to learn will help you overcome the fear. You can start investing more once you understand the stock market well and develop your trading skills.

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