The truth about investing: Debunking the myths

Think investing is only for the wealthy or financially savvy? You’re not alone – but the truth is, many of the most common beliefs about investing simply aren’t well understood.

In this guide, we tackle some of these myths head-on – from needing large sums of money to fears about risk and complexity.

Myth 1: You need a lot of money to start investing

Truth: You can start with small, regular amounts

Many people believe investing is only worth it if you have thousands to spare. In reality, it’s consistency that makes the biggest difference over time. By setting up a direct debit and investing a small amount each month, you can steadily build up your pot.

It’s a bit like going to the gym – results come from regular effort, not one big session. Over time, those small amounts can grow into something significant, especially when combined with compounding – where your gains start generating gains of their own.

Myth 2: Investing is only for the wealthy or financially savvy

Truth: Many people already have some exposure to investing, and with the right support it’s possible to build confidence over time

You don’t need to be wealthy or work in finance to begin your investing journey. In fact, many people already have exposure to investments without realising it – for example, through automatic enrolment in a workplace pension scheme, where contributions are typically invested in funds on their behalf.

If you’re able to set aside even a small amount regularly, there are accessible ways to build on this foundation. Today, there are more tools and resources available than ever to help, from beginner-friendly platforms to financial advisers who offer guidance based on your goals.

Whether you’re a newly qualified dentist, resident doctor or just starting out in another profession, understanding how investing works can be a useful step towards making informed financial decisions.

Myth 3: Investing is too risky – I could lose everything

Truth: All investing carries risk, but spreading your money across different assets and investing for the long term helps manage it

It’s true that investments can go down as well as up, and you might get back less than you put in. But there are ways to reduce the level of risk you take.

One way to do this is through diversification – spreading your money across different companies, sectors and asset types like shares and bonds. This can help limit the impact of any single investment performing badly. You can do this yourself or through a fund that does it for you.

The aim isn’t to eliminate risk entirely, but to manage it sensibly and give your money time to recover from any short-term dips. Taking a long-term approach – ideally five years or more – can improve your chances of riding out market ups and downs.

Myth 4: Cash is safer than investing

Truth: Cash offers stability and easy access, but its value can be eroded by inflation over time

Cash savings can play an important role in your financial planning, especially for short-term goals or as an emergency buffer. Savings accounts offer stability and liquidity, making it easier to access your money when you need it.

However, over the long term, inflation can reduce the real value of cash if interest earned doesn’t keep pace with rising prices. For example, if you leave £10,000 in a savings account earning 2% while inflation is running at 5%, your money’s purchasing power is effectively shrinking.

That said, investments can also lose value and returns aren’t guaranteed. They may not always outpace inflation either, particularly after fees and charges. Whether you choose to save, invest or a combination of both depends on your personal circumstances, including your goals, time frame and tolerance for risk.

Myth 5: You need to constantly monitor the markets

Truth: A well-diversified portfolio and a long-term approach mean you don’t need to watch the markets daily

You don’t have to be glued to financial news or checking your portfolio every day. In fact, constantly reacting to short-term movements could do more harm than good.

Once you’ve set up your investments, it can be better to check in a few times a year to make sure everything’s on track, rather than making changes every time the headlines shift. Investing can be viewed like a marathon, not a sprint – and letting your money grow quietly in the background is often one of the most effective strategies people use.

Myth 6: You should pull out of the market when things get volatile

Truth: Timing the market is difficult – staying invested means you won’t miss potential recoveries

When markets drop, it can be tempting to sell to avoid further losses. But doing so can mean missing out if markets recover.

Historical data shows that some of the strongest market gains have happened shortly after downturns. Missing even a few of these days can have a big impact on long-term returns. That’s why many investors choose to stay invested through periods of volatility, rather than trying to time their entry and exit points.

Myth 7: Past performance tells you everything you need to know

Truth: While history offers context, it doesn’t guarantee future results

It’s easy to be drawn to funds or investments that have performed well in the past, but no one can predict exactly what will happen next. Economic conditions change, and what worked well last year might not perform in the same way going forward.

What matters more is whether an investment suits your goals, time frame and attitude to risk. A financial adviser can help you make choices based on what’s right for you – not just what’s been trending.

The next step

If you’re interested in investing, don’t let myths and misconceptions stop you from building a better financial future. Investing doesn’t have to be complicated or out of reach, and the sooner you start, the more time your money has to grow.