Many investors and traders are reluctant to trade in the stock market due to varied myths. These myths are likely created by losing traders or those who believe that equity and commodity are difficult of an investment to recognize and act.
Top 13 myths of trading in the stock market are mentioned below
Buy The Stock Before The Price Get Much Higher - It’s greed to plan buying of a stock before the prices get higher and not wait for the right time.
Not Sell The Stocks Less Than The Capital Price - To not sell the stock less than the actual capital rate is your ego. It shouldn’t be done because anything can be happened in the share market anytime.
Good Portfolio is Important over Short-term and long-term investment - Some traders of the stock market think that a bunch of good fund can help to maintain long-term performance. But, this is not how the stock market business works.
Expect 10 % Minimum Return with 20 % Target - It is good to expect high returns, but expect the consistent return of around 5-6 % return. This is because, many a time, the stock market performs below an average.
Investing is not other than gambling - To be honest, your investment can never be a gambling. You are investing on buying stocks and sell it in the share market using great prospects of a business. Also, an investor can have an intention of owing the business or stock for several years.
Stocks of big companies are highly secure and safe - Big industries can’t insulate traders from failure. There is a huge list of big companies that are now out of the market and now in loss or not running. Whenever you choose any company for stock business, do a competitive research.
Investing in Stock Market is a big risk - Stock market is associated with risks, but not always. It can’t be said that investing is a big risk. Profit and good earnings are also generated many times. 1 out 10 chances are there to bear loss or risk on your investment.
No Loss Could be happened in Stock Business - Only gaining profits in the stock market is not possible. As in, ups and downs can happen anytime there. The cutting of losses can be done by technical analysis that gives signal of stock heading lower.
Low Priced Stocks are Always better - It is not estimated anywhere that the stocks of low prices are better than the stocks tagged with high prices.
Take Big Investment Risk To Get High Returns - Some newbie investors think that big risks in stock market can return a big potential return. It is totally false. Big risks can even enable investors to get huge loss that can’t be covered in a few years.
Invest As Influence By Acquaintance - For many traders, the choice of buying and selling the stocks is heavily dependent on what influences speak to them. This is what called as having a herd mentality. One should avoid such practices for better investment.
Best Friend As A Broker Gives The Right Direction - A good investor never thinks that a broker as your best friend gives you the right direction to invest in the stock market. Because, everyone sees their own profit, no matter how big loss can other investor/company might have in the current market.
Only Genius Can Make Money In Stock Market - For making money on little investments in the stock market, an investor doesn’t need to be genius. an investor should know the right equity and commodity tips to enhance profit.
If still you have lots of misconception about stock market investment, then you should consult with stock market expert or SEBI registered stock advisory firm in India to get proper advice from expert advisers as per the technical and fundamental analysis of the market.