Stock Market Investment Myths

The 3 most common myths busted

 

Stock Market has given the best returns and beaten all other investments available like bonds, commodities, gold etc, and is definitely one of the favourite choices of the people.

Although everyone has thought of investing on their own but have stopped because of misleading news, tips or advice from friends and family. So, let’s take control of our freedom of investing by overcoming few common investing myths.

The 3 Most Common Stock Investing Myths –

  1. Investing in the Stock Market is a GAMBLE.

This myth has become so popular that some people have adopted gambling theories to invest.

So let’s compare the stock market and gambling to gain a clear understanding about them. Firstly, both involve money and an element of chance. Secondly, the risk is involved in both gambling and stock investing. Third, both involve uncertainty of winning or losing.  Most people after considering these three points come to the conclusion that both investing in stocks and gambling is the same.

Now, let’s see things from another point of view and note the differences. Although blindly investing in stocks is similar to rolling dice, but successful investing is never a game of chance. The art of investing is based on risk and reward. Gambling doesn’t allow anyone to change the probability. There is always a 50-50 chance of getting a ‘head’ or ‘tail’ while gambling on a coin toss.

However, through knowledge and skills, Investors can change the probability of winning. Investors can reliably predict the outcome, which follows trends, patterns as per a defined trade plan. Although, no one knows the future investors have been able to put the odds in their favour thorough analysis, proper studies & training.

On considering the aforementioned points, investing in stocks is nothing like gambling. Whereas, it is an opportunity to utilize your hard earned money for gaining the best possible returns.

  1. You need Lot of money to make money.

People assume that you can’t start investing till you have a lot of money. This makes investing a ‘rich people’s game’. However, this isn’t true. You don’t need millions to start investing. A good thorough study about the company and just a few bucks in the bank is enough to start investing. Even the greatest investor of all time, Warren Buffett, started his first investment with only a few dollars at an age of eleven. He didn’t need a million dollars to make him a billionaire. So, why should you?

Everyone can start investing with even the little amount they have.

  1. Investing on your own takes too much time & is very risky.

In today’s world technology has completely changed the way information is transmitted. This has allowed an average investor to access information quickly and easily to make smarter and faster decisions.

In general, risk comes from not knowing what you are doing. Definitely, without a proper education stock market is risky. But with proper training and knowledge, anyone can increase reward and reduce risk.

 

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