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3 Mins Read
Raseed may not be the Mythbusters, but that doesn't mean we're not busting myths on a regular basis. Investing has become a lot more accessible in recent years and the same truisms that once ruled the market no longer stand at the top.
Here are the biggest myths you may have heard about investing in US stocks, debunked.
If you didn't grow up with a trust fund or stock inheritance, you're probably not part of the population that has generational wealth.
According to the Federal Reserve (aka the US central bank), the richest 10% of Americans own a whopping 89% of US stocks. But democratization is changing that. Now, with investment apps that offer fractional investing, it's easy to access stocks and start growing capital from just a dollar.
Related: How to start investing for as little as $1
Day trading is often compared to gambling, but there are other types of investing. Even if you do use a portion of your cash to day trade (using only what you're willing to lose), you can keep the rest of your investments in swing-term and long-term trades.
Swing-term traders typically invest for a few weeks to a few months, while long-term traders stay in a position for a year or more before selling. The stock market inevitably recovers as long as there's economic growth.
Blue-chip stocks are those that have proven themselves on the market over a period of years. They typically come from companies that are household names. But no matter how "great" a company is on paper, appeasing shareholders in the public market is a whole different game.
For example, AT&T stock (NYSE:T) comes from a well-known, profitable company. However, it's stock has lost about 35% of its value over the last 20 years.
On the flip side, Hometown Deli in Paulsboro, New Jersey is a small storefront that was publicly traded with a market cap of $113 million. It has since delisted over claims of financial irregularities that suggested the business was a front for international crime. Just like a successful company doesn't mean a successful stock, a booming stock doesn't equate to a great company.
Thanks to convenient investing apps, it's easy to trade—and it doesn't require your unwavering attention. You can invest strategically and check back every now and then (daily, weekly, monthly, or longer, depending on the strategy you choose).
You don't necessarily need a financial professional to guide your investing. By starting small and learning as you go, you can become comfortable in your investing skin. Over time as your wealth grows, you may be more inclined to enlist the help of a professional advisor, but it definitely isn't necessary to get started.
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