Myths About Stock Market
At the outset of George’s investment journey, he faced skepticism and criticism from his friends and family due to the perceived risks involved.
They were constantly monitoring his actions. Like every stock market-orthodox mindset, certain myths strengthened in the initial phase of George’s journey when his family saw him losing money and taking bold steps.
Below is the conversation between George and his father and how he tackles them:
George’s Father- Don’t you know Investing is pure gambling, and people lose all their savings and even stake their homes for this? It is an addiction!
George – Father, Gambling is the bets whose outcomes are unknown or cannot be pre-tested.
Investment involves tactical analysis of the company’s Fundamentals, which talks about the business – its sales, revenue, earnings, and growth.
George’s Father- But we cannot afford to give so much money, especially for those investments whose returns are uncertain.
George – One can start investments with as low as $100 and benefit from capital gains and yearly dividends.
George’s Father- Only experts can find those multi-bagger stocks and bear that much risk. Also, there is nothing “guaranteed” in the stock market.
George – It’s not just an expert call. From a 12 year child to an 80-year man, everyone can enter and earn in the stock market. We only need to educate ourselves, do analytical research, and invest in quality stocks.
Nothing is guaranteed in the stock market, so it is advisable to “diversify” the risk by employing funds to stocks, bonds, and mutual funds.
Here are a few myths and misconceptions surrounding stock market investing.
- Like Gambling: The stock market is like a Casino
- Too complicated: I need to be an expert to Win
- Only rich people invest: I need a lot of money to Start
- High Risk, High Reward: I need to take high risks for High Returns
- Timing the Market: I can consistently buy low and sell high
- Quick Rich: I can get Get Rich quickly & easily
- Past Performance: Indicates Future Results
Key Takeaway
Having sound financial knowledge can help overcome many myths and misconceptions surrounding stock market investing. With a good understanding of the fundamentals of investing, investors can avoid common pitfalls.
At the outset of George’s investment journey, he faced skepticism and criticism from his friends and family due to the perceived risks involved.
They were constantly monitoring his actions. Like every stock market-orthodox mindset, certain myths strengthened in the initial phase of George’s journey when his family saw him losing money and taking bold steps.
Below is the conversation between George and his father and how he tackles them:
George’s Father- Don’t you know Investing is pure gambling, and people lose all their savings and even stake their homes for this? It is an addiction!
George – Father, Gambling is the bets whose outcomes are unknown or cannot be pre-tested.
Investment involves tactical analysis of the company’s Fundamentals, which talks about the business – its sales, revenue, earnings, and growth.
George’s Father- But we cannot afford to give so much money, especially for those investments whose returns are uncertain.
George – One can start investments with as low as $100 and benefit from capital gains and yearly dividends.
George’s Father- Only experts can find those multi-bagger stocks and bear that much risk. Also, there is nothing “guaranteed” in the stock market.
George – It’s not just an expert call. From a 12 year child to an 80-year man, everyone can enter and earn in the stock market. We only need to educate ourselves, do analytical research, and invest in quality stocks.
Nothing is guaranteed in the stock market, so it is advisable to “diversify” the risk by employing funds to stocks, bonds, and mutual funds.
Here are a few myths and misconceptions surrounding stock market investing.
- Like Gambling: The stock market is like a Casino
- Too complicated: I need to be an expert to Win
- Only rich people invest: I need a lot of money to Start
- High Risk, High Reward: I need to take high risks for High Returns
- Timing the Market: I can consistently buy low and sell high
- Quick Rich: I can get Get Rich quickly & easily
- Past Performance: Indicates Future Results
Key Takeaway
Having sound financial knowledge can help overcome many myths and misconceptions surrounding stock market investing. With a good understanding of the fundamentals of investing, investors can avoid common pitfalls.