There are a number of philosophies about the stock market that make people hesitate to invest in stocks. We have exposed the details on some of those myths.
Investing is like gambling
In gambling, money from the loser is given to the winner. It has no additional value. Further, in order to draw people to open a Demat account and invest, companies compete, boost production and even come up with products that can make our lives enhanced, escalating the wealth of the economy too.
Market is limited
The emerging of internet has brought with it a market that is “open” to the public. Technological assistance like research tools and data can now be accessed by people, who can invest with zero brokerage charges.
What falls goes back up
The conviction here is that ultimately a fallen stock will go back to its high levels again. Price is just one part of the investing equation.
The objective is to put your money into good companies at a logical price whether throughintraday trading or by other means. Not just for the reason that a particular company’s market price has fallen.
What raises up must come down
Stock prices are likely to experience corrections due to several reasons. But the stock value also echoes the company. If the organization is supported by good staff, there is every reason for the stock to keep going up.
History will repeat
There are times when history repeats. But the cause behind the last economic downturn would hardly be a dependable way to predict the future causes for change in stock value.
So when it comes to investing, the truth remains that no one will precisely predict the market value based on the past events and time the stock market as the estimate may go either way.
Additional the risk – better the return
Here, the characteristic hypothesis is that risk is equal to the price changes. Market instability is just one aspect of the risk.
So the focal point should be on the basis behind the current price of stocks and how it contests to the fundamentals of the company.
And as for the “real” risk, it rages down to the prospect of losing the chief amount you invested by opening a trading account.
Discriminating myths from fact goes a long way in altering your investment approach and mindset.