There are myths about stock market. Here are some examples.
Stock is highly risky
Yes, stock is highly risky if one is not of aware of what he is doing. However, there are plenty of investment that are much riskier than stock investment. To be frank, to successfully make profit consistently from stock market is not by luck. It only rewards investors who have the skills and discipline. People who do not do their homework before investing, I would say more than 80% chance they would lose money. From that perspective, I agree it is highly risky. However, which investment on earth doesn’t require investor to do homework?
Stock would make me bankrupt
We heard that someone got ‘burnt’ in stock market and became bankrupt. Wow! Sounds cruel! Hang on, this is true only if a person buys stock with borrowed money, aka margin and contra. Some of them buy without having sufficient asset/cash to back them up. In the event the stock price falls, they still have to pay for the debt. Here the problem comes if they do not have sufficient cash reserve to clear the debt.
Therefore the question is, can it make me bankrupt if I invest without borrowing? The answer is no. Invest only the spare cash that I can afford to lose, stock market will not make me bankrupt.
It is gambling
Of course a person could treat stock market as casino. For a problem gambler, he could bet anything on earth. For example, soccer is a sports but we may place our bet who the winner is, the score etc. So can we say soccer is gambling? It is not the problem of the game but the behaviour of a person. Stock market is not meant for gambling but it can’t help if someone wants to treat it as casino.
I treat stock market as the market place where I can exchange my shares (investment) with other investors efficiently, quickly, at transparent market price.
Stock is for the rich
Some people think that they need a lot of money to invest in stock. The actual answer is no. You certainly need some cash to start, but it definitely doesn’t require you to have thousands of dollar in order to start investing in stocks.
It is difficult to master Stock Investing
Investing successfully certainly needs skills. However which investment on earth doesn’t require skills? Property investment, such as buying an apartment and hoping to rent it out, seems easy, but there are also plenty of failures which non skilled property investors do not publicly share. I would say, nothing on earth is easy if we want to be successful, especially when it comes to making money!
Like our facebook page to receive more updates in future.
