The stock investment industry is murky water to most. Many myths and misconceptions touted by poorly informed people scare off investors looking to start investing in stocks. Let’s look at some myths and misconceptions that should not dissuade you from following your dreams of stock investments.
1. The Stock Market is for the Rich
Most people still think you need millions to start investing in the . That is far from reality. You can get stocks for as low as five dollars if you know where to look. The can get good returns depending on the risk and return ratio. Investing in low-priced stocks is also a risk-mitigating strategy because it helps reduce the financial impact in case the stock value tanks.
2. You Are Guaranteed to Make Returns
The stock market is not a get-rich-quick set-up. Most investors have to wait for years before making a significant return on investment. However, if you work on growing your stock market knowledge, you will inevitably grow your earnings through well-thought investment strategies. So, take your time!
3. You Are Too Young to Invest in the Stock Market
When we hear about the stock market, we often see grey-haired men and women sitting around a table throwing around complex terms. Don’t let the jargon or the ages fool you; you can invest in the stock market from a very early age and learn the ropes as you grow older. For sure, the younger you are, the better.
4. One Person Can Predict the Stock Market
No one can predict the stock market. Even the biggest stock market traders have bad days on the floor where they lose millions. The beauty of the stock market is that you can lose millions today and gain billions tomorrow’ so don’t let one setback put you down.
5. I Need to be Excellent in Mathematics to Invest in the Stock Market
Looking at the random numbers on the stock market board, you might be duped into thinking you have to be a mathematician to understand the rocket science of stocks. That is not the case; you do not need to rack your brain to understand complex math, all you need is the basic arithmetic skill, and you are set for success.
6. You Need a Mentor to Make Money in the Stock Market
Many areas of life require the help of a mentor to succeed but not the stock market. You can invest in the stock market without the help of a mentor or guru and still make it work. All you have to do is dedicate time to learning the inner workings of the trade and putting in the effort. The idea that someone else is the best at stock trading can get you in trouble because you will be more likely to follow what they say without exercising independent thought.
7. Only Stocks From Popular Companies Sell
Buying stocks from popular companies only does not guarantee you returns. Even large companies experience stock price drops. Some companies have volatile stock prices, which are not ideal for a newbie. It is best to research and hand pick the companies you want to invest in based on merit. You will not regret working with hard facts over public opinion.