Investing myths: Separating fact from fiction in investing

August 09, 2023


Investing is an important part of your financial plan but investing myths can get in the way. These tips can help you uncover the reality of investing.

You’ve worked hard for your money, so it’s important that you have a solid financial plan that will help protect your wealth. Your investment strategy is a large part of that plan—and a smart strategy takes research and thoughtful decision-making. 

Unfortunately, there are some misconceptions about investing that can slow you down. To identify the money moves that are right for you, let’s debunk four common investing myths. 

Investing myth #1: Saving should be a higher priority than investing

“It’s important to both save and invest,” says Christy Isordia, Wealth Management Advisor with U.S. Bancorp Investments. “You should always have an emergency fund, but after a certain amount, you need to make sure you have other accounts in place.”

The truth is that putting money away for the future in both saving and investment accounts is an important part of a financial plan. Isordia recommends that you begin investing either by opening an IRA or by taking advantage of a workplace retirement plan. “You should also continue saving, because you don't want to be in a situation where you invest all your money and then retire, and you have to pull only from investments to live,” she adds.

  • Five years or less: A savings account is a good vehicle for your emergency fund and short-term financial goals, such as saving for a house, wedding or vacation. Savings vehicles include basic savings accounts, short-term CDs and money market accounts, all of which allow easy access to your funds while your money potentially earns interest. Up to $250,000 in these accounts is also insured by the Federal Deposit Insurance Corporation (FDIC).
  • More than five years: If you won’t need the money for a while, investing can be a good strategy. It’s a long-term play, giving you the potential to earn higher returns through the power of compounding. You can choose from a range of investment accounts and investment vehicles

The type of investment vehicles you choose will depend on your age, risk tolerance and time horizon. For example, younger working people may tolerate higher-risk investments, such as stocks, because they have time to withstand market fluctuations. Someone nearing retirement, however, will want to look for lower-risk investment vehicles, such as bonds.

Isordia tells clients who have access to workplace retirement plans that they’re losing money if they are not taking advantage of their employer’s matching contributions. “I recommend that they at least start contributing the same percentage that their employer is matching, and then build from there,” she says.

Investing myth #2: Investing always comes with high fees

The truth is that investment fees will vary depending on how you choose to invest and what you invest in. You should be aware if fees start affecting your rate of return and your financial goals. 

Fees typically accrue for the handling of your assets or for the expertise required to manage the portfolio. For example, mutual funds charge expense ratios to cover management costs, while retirement accounts may come with a custodial fee to compensate for satisfying IRS reporting regulations. 

Fees can be visible and invisible. A visible fee will be a line item on a statement, such as a commission on a trade. An invisible fee, however, is reflected in the value of the asset and isn’t a standalone figure on a statement. One example of an invisible fee is a “sales load” investors pay to purchase or sell a mutual fund, which is deducted directly from the investment.

While fees are hard to avoid, you can potentially reduce them by investing on your own via self-directed investing or by investing via an automated investing platform, also known as a robo-advisor. These investment strategies usually incur fewer fees. However, paying for a professional’s expertise and time with an actively managed fund has the potential to increase your rate of return over the long run.

Investing myth #3: You need to work with a financial professional to invest

While a professional can be a valuable partner for developing your investing strategy and identifying new opportunities, working with one is certainly not required. 

That said, if you have a sizeable amount of money to invest, have complex goals or want more guidance than simple investment management, it’s probably best to work with a financial professional who will tailor your plan to your situation.

If you’re new to investing or prefer to invest independently, you could consider an automated investing platform, such as Automated Investor from U.S. Bancorp Investments. These digital tools provide investment services rooted in automation and algorithms. 

To get started with one, you’ll typically answer some basic questions, such as, “How much do you want to invest?,” “What are your goals?” and “What level of risk are you comfortable with?” The tool analyzes your answers and builds a customized portfolio with a mix of funds that meet your criteria.

An automated investing platform is handy if you want a more hands-off approach to investing. It may manage your portfolio for you, including regular rebalancing of investments in response to market changes.

Whether you choose a financial professional or automated investing platform, it’s all part of building a better financial future. “We can help people work toward their financial goals, whether it's saving for retirement, buying a house or paying for their kids’ college tuition,” Isordia says.

Investing myth #4: It’s selfish to pay yourself first

“It's important to set yourself and the next generation up to be successful financially,” Isordia says. “You have to take care of yourself first to be able to effectively take care of others.”

If you set yourself up for success through saving, investing, estate planning and other smart strategies, you’ll be better placed to help those you love.


Not sure where to start? Take the investing options quiz offered by U.S. Bancorp Investments. Answer a few simple questions. Review your options. And then consider which path forward makes the most sense for you.

Related content

How much money do I need to start investing?

Why compound annual growth matters

A guide to tax diversification in investing

What type of investor are you?

Saving vs. investing: What's the difference?

Understanding yield vs. return

Do your investments match your financial goals?

Start a Roth IRA for kids

Investment strategies by age

How to start investing to build wealth

5 questions to help you determine your investment risk tolerance

Robo advisors vs. financial advisors: How are they different?

Investing myths: Separating fact from fiction in investing

Guide for investing

7 diversification strategies for your investment portfolio

4 major asset classes explained

ETF vs. mutual fund: What’s the difference?

Effects of inflation on investments

4 times to consider rebalancing your portfolio

What types of agency accounts are available for investors?

How do interest rates affect investments?


Start of disclosure content

Investment and insurance products and services including annuities are:
Not a deposit • Not FDIC insured • May lose value • Not bank guaranteed • Not insured by any federal government agency.

U.S. Wealth Management – U.S. Bank | U.S. Bancorp Investments is the marketing logo for U.S. Bank and its affiliate U.S. Bancorp Investments.

The information provided represents the opinion of U.S. Bank and U.S. Bancorp Investments and is not intended to be a forecast of future events or guarantee of future results. It is not intended to provide specific investment advice and should not be construed as an offering of securities or recommendation to invest. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Not a representation or solicitation or an offer to sell/buy any security. Investors should consult with their investment professional for advice concerning their particular situation.

U.S. Bank, U.S. Bancorp Investments and their representatives do not provide tax or legal advice. Each individual's tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation.

For U.S. Bank:

U.S. Bank does not offer insurance products but may refer you to an affiliated or third party insurance provider.

U.S. Bank is not responsible for and does not guarantee the products, services or performance of U.S. Bancorp Investments, Inc.

For U.S. Bancorp Investments:

Investment and insurance products and services including annuities are available through U.S. Bancorp Investments, the marketing name for U.S. Bancorp Investments, Inc., member FINRA and SIPC, an investment adviser and a brokerage subsidiary of U.S. Bancorp and affiliate of U.S. Bank.

U.S. Bancorp Investments is registered with the Securities and Exchange Commission as both a broker-dealer and an investment adviser. To understand how brokerage and investment advisory services and fees differ, the Client Relationship Summary and Regulation Best Interest Disclosure are available for you to review.

Insurance products are available through various affiliated non-bank insurance agencies, which are U.S. Bancorp subsidiaries. Products may not be available in all states. CA Insurance License #0E24641.

Pursuant to the Securities Exchange Act of 1934, U.S. Bancorp Investments must provide clients with certain financial information. The U.S. Bancorp Investments Statement of Financial Condition is available for you to review, print and download.

The Financial Industry Regulatory Authority (FINRA) Rule 2267 provides for BrokerCheck to allow investors to learn about the professional background, business practices, and conduct of FINRA member firms or their brokers. To request such information, contact FINRA toll-free at 1-800‐289‐9999 or via An investor brochure describing BrokerCheck is also available through FINRA.

U.S. Bancorp Investments Order Processing Information.