Lesson 12 of 43: 18 Stock Market Investing Myths Debunked

  • We cover 18 common myths about beating the market, the true costs of Wall Street’s fees, which stocks perform best, and how much money you need to invest in the market. 
  • Some myths are promoted by Wall Street pros (to lure in your money) while others are repeated by regular people who don’t understand investing. 
  • Understanding why these 18 myths are untrue will propel your investing knowledge to another level.  

The stock market is full of myths of all different shapes and sizes.

To a new investor, many seem like they could be true until you really unpack them.

Below we outline the most common myths that hold people back from investing or cause them to make painful mistakes.

Stock Market Myth #1: Investing in Stocks is Like Gambling

This one is very common among people who know nothing about stocks. Because they know so little about the stock market, they choose to believe it’s random, unpredictable, and dangerous.

But in reality, stocks are not a random game of chance in which the long-term odds are stacked against you. Actually, it’s quite the opposite!

There are many strategies that have been proven, through extensive research, to boost investing profits over the long term.

And there has never been a 15-year stretch since 1926 when the stock market (S&P 500) didn’t deliver a profit. And it has delivered a profit in 94% of 10-year periods and 86% of 5-year periods since 1926.

How many Vegas casino games do you know with a long-term win rate between 86% and 100%?

However, like many myths, sadly there’s a tiny kernel of truth to the idea stocks are like gambling.

Here’s why:

If you take your money and spread it recklessly around a bunch of penny stocks without doing any research and you’re just hoping to somehow get rich quick, that’s kind of like gambling.

Or, if you put all your money into a single red-hot “can’t lose” stock plastered all over the news headlines