There are commonly held beliefs in investing. But the sad part is that not all of them are true. These myths might mislead you into thinking you’re making a sound judgment. Losses, not gains, will shock you in the end.
Here are two investing lies that won’t make you rich, because you’re on the wrong side of investment know-how.
Investing is only for the rich
One fallacy in investing is that it’s only for people who can afford to make lump-sum investments. On the contrary, if you have limited capital, investing in the stock market is not off limits to you. You can get rich by buying low-priced stocks that pay high dividends.
Chorus Aviation (TSX:CHR), for example, is an affordable stock. The price of this $1.27 billion company is $7.98 per share, but the stock pays a generous dividend of 6.28%. Earning $628 on a $10,000 investment is not bad at all. Over the last 10 years, Chorus has a total return of 439.92%.
The company is known around the world as a provider of integrated regional aviation solutions. Chorus is based in Halifax, Nova Scotia, and has been operating in the airline industry for almost a decade now.
Chorus, through its subsidiaries Chorus Aviation Capital, Jazz Aviation, and Voyageur Aviation, offers a full suite of regional aviation support services. Among the services are aircraft acquisitions and leasing, aircraft refurbishment, engineering, modification, repurposing, and preparation.
Moving forward, Chorus should produce stable free cash flow. The company has a contract to fly Air Canada’s regional routes through 2035. Also, analysts see a potential capital gain of 28.45% in the next 12 months, plus an annual growth rate of 10% in the next five years.
Past performance is a reliable guide
Another misconception is that past performance guarantees future performance. Stocks that performed well in the past will not necessarily perform in the future. In reality, investing comes with the risk of losing money.
However, there are buy-and-hold stocks that you can build serious wealth with over the long term. The companies have great balance sheets, reasonable valuations, and plenty of room for growth. A company that possesses such qualities is energy giant Suncor (TSX:SU)(NYSE:SU).
You’re in the company of Warren Buffett if you become an investor in this $63 billion firm. Suncor is only one of two Canadian stocks the value investor holds in his portfolio. Also, Buffett doesn’t believe in quick wins. He prefers companies that can endure a market crash and have the potential to be successful in the future.
The nearly seven-decade-old Suncor is the largest integrated oil company in Canada and the largest oil sands operator. With its 4.32% dividend, you can grow your savings meaningfully well into the future.
Begin your journey to wealth
“Investing is only for the rich” and “past performance is a reliable guide” are two classic investing myths. The most successful investors who are wealthy today did not fall for these lies.
With a small amount, you can earn big from Chorus Aviation. If you’re investing for the long term and want a safety net, Suncor is the best of the bunch. Investing in both stocks can be the beginning of your journey to wealth.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Christopher Liew has no position in any of the stocks mentioned.