You should buy a home in an up-and-coming neighborhood.

Buying a home in an up-and-coming neighborhood can seem like a no-brainer for investment. The idea is that as the area improves, property values will increase, which can result in a profitable sale in the future. However, this assumes that the neighborhood will indeed improve and that real estate prices will go up.

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Only invest in actively managed mutual funds.

The statement “Only invest in actively managed mutual funds” is a financial fallacy because it wrongly assumes that actively managed funds always outperform passive funds or indexes, which is not always true. While the main goal of actively managed funds is to beat the market, not all of them do, and their fees are often higher than passive funds. High management fees can greatly eat into the returns you would otherwise be making. Moreover, the performance of such funds depends heavily on the fund manager’s investment decisions, which can be quite risky.

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