FinancialEdge: Investing Myths That Need To Go

It is almost impossible to make good decisions using out-of-date information. Imagine trying to drive around a fast-growing city like Las Vegas with a map that was printed in 1980. Similarly, investors should be very careful about relying upon old sayings about the stock market - sayings that are so old that they have transitioned from helpful advice to potentially harmful myth. (Learn how to stop using emotion and bad habits to make your stock picks. Check out How To Avoid Common Investing Problems.)

You Cannot Beat the MarketAcademics have spent a lot of time trying to convince people that it is not possible to beat the market. Fortunately for investors, the models that support those analyses are simplified versions of reality with real flaws. In actual practice, people can and do regularly beat the market. It is not easy, and nobody beats the market every year, but it does happen and there are ample studies that show that following simple value-oriented strategies can lead to consistent market-beating returns. 

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