Bitesize: We bust 2 of the biggest myths when it comes to investing

Alec: [00:00:07] Welcome to Bite size on Get Started Investing feed. In this series, we feature some of our favourite lessons, quotes and moments from the podcast. If you'd like to listen to the full episode, we've included the link in the shownotes. 

Bryce: [00:00:21] What was one of the biggest myths that you face? 

Alec: [00:00:23] And there's some pretty common ones that we speak to some of these guests about, so we don't talk about too much. Do I have enough money to start investing? Investing isn't for me. I'm not an expert. Like, oh, all of that stuff I think is pretty important, but we don't need to rehash it. So in terms of myths that we don't really talk about and this one's going to be controversial, so I'm interested to throw it out there and see what you have to say. Biggest myth that I have since realised is not true is that the Daily Finance news has anything to do with investing. 

Bryce: [00:01:02] Well, yes. 

Alec: [00:01:04] What I saw on about 715 on the ABC every night was in any way related to investing. 

Bryce: [00:01:12] In things that are growing.

Alec: [00:01:13] And growing. That was my only exposure to investing. Qantas was up 2%, the S&P 500 was down 4%. Gold Here's a chart for gold over the last month. That's what I thought investing was. I thought it was a bunch of tickers and numbers moving day to day, but it was completely uncorrelated to the real world. You know, calls could be up or down and, you know, they're going to sell pretty much the same amount of groceries that they sold yesterday. But their share price can do wild things. And I just thought it was this uncorrelated world that sat over there and the real world was separate to it. And it was just numbers on a screen. And you had to understand that world to make money in it. But what I've learnt is that the numbers on the screen, the day to day noise , the way that we report financial news, it's just all unnecessarily confusing. And all you need to do is understand the real world and what's going on with real companies led by real people to make money in the stock market. And you can cut away a lot of that noise that seems to exist.

Bryce: [00:02:18] Bye bye, Alan Collar. 

Alec: [00:02:20] Look, it's nothing about Alan in particular. Like it's systemic. Yeah, yeah, yeah, yeah. 

Bryce: [00:02:27] That's a good one. That's a good one.

Alec: [00:02:28] So that's a myth. We're also talking about barriers here. So are there any barriers that you face that you've overcome in your investing journey? 

Bryce: [00:02:38] One would be around the feeling of always needing to be right. When you make an investment.

Alec: [00:02:45] You have a need to always be right. Full stop. 

Bryce: [00:02:48] Why? Yeah, I felt as at the start of my investing journey, you know, you would, you would make less investments because you would be fearful that it wasn't always going to be the right investment. And there was plenty of choices out there and plenty of things to choose from. And you felt like it had to be the best investment possible. And whilst that is true, I've since learnt and I guess by Ms. Bastard, that even the best fund managers don't get every single investment right. And so getting into the mind and mind frame of knowing that when you go in to make an investment, the likelihood of it not being right is probably more so than not. But you only need, as we've spoken about many times in the show, you only need three out of ten investments to go gangbusters and. 

Alec: [00:03:34] Three out of ten you've done the maths on. 

Bryce: [00:03:35] Three out of ten. Yeah. And you're doing well. So yeah, a barrier of feeling like you need to be right all the time is one worth overcoming sooner rather than later. 

Alec: [00:03:47] Yeah. I think tied to that you're also always searching for the very best idea, unlike if you're a professional fund manager, if you're Warren Buffett, if you're Hamish Douglass, that is your job to find the very best idea. But if you're an everyday punter like you and I, there's nothing wrong with the 10th best idea or the 20th best idea being a starting point. And as you look for better options, yeah, there's plenty of ways to make money in the stock market and there's plenty of stocks that will make you money in the market. You shouldn't lose like a wink of sleep about whether the ASX 200 index ETF or the S&P 500 Index ETF will do better over the next year or two because they will likely, over the long term, both make you money. Yeah, this is a saying that I often say in that you guys get sick of me saying, but a barrier that I think was important for me to overcome was not letting perfection be the enemy of the good, because good can be great if you let it compound over a long period of time. Yeah, good is good enough. 

Bryce: [00:04:49] Good is good enough. Yes. All right. Well, without further ado, let's jump in and hear from our amazing contributors from the Get Started Investing feed community about other barriers and myths. If you enjoyed that bite size, you'll find a link to the full episode in the show notes.