Nowadays, many people are getting attracted towards the stock market to make an investment and achieve their financial objectives. The stock exchange is an excellent source to earn extra income and get profitable returns. Although making a stock market investment may look like an enticing option, most of the people put their plan of buying shares in a cold baggage because of certain myths or misconceptions.
So, let us have a look at certain misunderstandings surrounding the stock market so that you can invest with a greater peace of mind and most importantly achieve financial freedom.
Myth 1: Stock market investment and gambling are similar
This is one of the biggest myths that have been heard from the colleagues, friends or family members. Now, the question pops out here are both the stock market and gambling involve money, risk and no surety of profit or loss, then what is the main difference between the two? The question is quite valid, but let us have a look at it from the different perspective. There is no doubt that investing in the stock exchange without any research work is just like rolling a dice in an anticipation of making quick profits. However, through the best knowledge and skills, a person can achieve success in the market and get better returns. On the other hand, there is no second chance in gambling. Here, either you win or lose your hard-earned money instantly on a coin toss.
Myth 2: Stock market is only meant for the rich people
It is one of the common myths that discourage people to trade in the stock market. Most of the individuals, have a misconception that for investing, you need loads of money, but that is totally baseless and nothing else. You do not need to be a millionaire to start investing. You may be surprised to hear that you can invest in the stocks with a few bucks. Even the third richest person in the world, Warren Buffett, invested fewer dollars initially at a very young age. So, it clearly suggests that do not have to be ‘Super Rich’ to invest in the stock market.
Myth 3: Investing consumes a lot of precious time
In today’s competitive world, time has no doubt become a precious commodity. Many people, tend to have a notion that you need to be present in the stock market all the time to trade and this means, you may have to leave your job and waste time. Earlier, the investors were required to visit the stock exchange personally to buy or sell the shares, but now with a drastic change in the technology over the years, has completely redefined the way people used to invest or trade in the stock market. Nowadays, there are lots of stock market apps are available where you can get the real-time stock updates and take smart investment decisions.
Myth 4: Investing is only meant for the younger generation
First of all, it is imperative to know that there is no age limit in the stock market with regard to investing or trading. Both the younger and older can invest in the shares. Let me ask a question, would you not need money to take care of your requirements at an older age? Definitely, you require funds to survive and if you want to invest, then age is not a limitation and the doors of the stock market are always open for you. However, make sure that you have got the best knowledge about the market because it requires a lot of hard work to earn money and you cannot even imagine losing them because of insufficient information.
Myth 5: Having Less Stock Market Knowledge Can Lead to Better Returns
A half knowledge is always dangerous because if you think that one can become a stock market expert by reading some investing or financial books, then you are absolutely wrong. Let’s say that you invest in the shares of a particular company without any research work. After one week, the share price goes down, then just imagine the financial loss you have to suffer. The loss could have been avoided if you were little more cautious and researched about the shares before making an investment. So, it is imperative that you must first update your information and undertake a deep research work before putting your hard-earned money into any shares.
Hence, it is crystal-clear that for a successful stock market investment, having a good knowledge, best decision-making skills and logical thinking is required rather than believing the myths. It is important that you must also take expert advice from your friends or colleagues to invest and materialize your dream of having an excellent financial wealth. All in all, stock market is for everybody and maintaining a safe distance from the misconceptions will only yield fruitful results in the form of profitable returns.