The Nine Biggest Stock Market Myths
Myth #1 Investing in Stocks Is Just Like Gambling
This reasoning causes many people to shy away from the stock market. A share represents an ownership
in a company. It entitles the holder to a claim on assets as well as a fraction of the profits that
the company generates. It is like you buying a stake in the business which is professionally run.
Myth #2 The Stock Market Is For Rich People
In today's scenario it is easy to participate by investing in stocks either directly or indirectly
with even smaller amounts just like your bank recurring deposit.
Myth #3 It Requires a finance backrgound like a CA or MBA to be successful in Investing
Fact is, you don’t need to know everything or have experienced at all before starting out.Keep in
mind that you can always start from where you are.An interest to keep learning is more essential than
knowledge.
Myth #4 I need to track the stock price every day
If you are investing in markets, you may need to track the business performance once in three months
when it announces quarterly results. If you indirectly invest via an equity mutual fund probably you
may need to review the performance annually or semi annually. You can also opt for advisors who can help you in this process.
Myth #5 I am too old to invest in markets and take the risk
Today with falling bank interest rates, senior citizens who used to get high interest rates are worrying about their future. There are very low risk opportunities to safely gain around 10-12% p.a. by investing in equities. However this would require a careful analysis to select stocks or mutual funds based on your risk appetite. Remember Warren Buffet made 90% of his wealth after the age of 60. Age is just a number. With improvements in health care a retired individual can live easily till age of 90-100. This means they need to plan atleast 30-40 years post retirement expenses for self and spouse.
Myth #6 I think stock market is risky and have seen many people lose money in it
Risk comes when we invest money without a proper understanding. There are certain rules of investing
and stock selection. Those who lose money, mostly have broken the rules and have lost money. The
successful investors keep learning to manage the risks and thereby create wealth.
Myth #7 I am already successfully having a business, why risk in stock market
Every business has its ups and downs. Stock Market helps a business owner to diversify his risk and
thereby create wealth for his family without solely depending on the growth of his/her business
alone. Also it is a way to leave a legacy for your family and also to organisations who you want to support.
Myth #8 I can take care of my goals just by investing in Fixed Deposits, Real estate and gold
Today real estate prices are high, and it with demonetization and RERA many feel real estate prices
will correct further. Also liquidity in real estate is very low, especially when you want to sell
immediately. Gold, has historically kept in pace with inflation, but has not created a huge wealth in long run. Thus it is important to allocate some money to equities to create long term wealth
Myth #9 If someone is successful in investing, why should they teach about it
When I teach, I also constantly keep learning and it helps me to become a better investor.Teaching
for me is a way of giving back to the society what I learnt by trial and error. It is easy if you
learn from those who have done it practically and have the experience. This can save time, money and energy in your journey towards financial freedom.
Before you get in the world of Investing you need to get educated.Education is empowerment. As you
learn more, you will naturally make better decisions.
Myth #1 Investing in Stocks Is Just Like Gambling
This reasoning causes many people to shy away from the stock market. A share represents an ownership
in a company. It entitles the holder to a claim on assets as well as a fraction of the profits that
the company generates. It is like you buying a stake in the business which is professionally run.
Myth #2 The Stock Market Is For Rich People
In today's scenario it is easy to participate by investing in stocks either directly or indirectly
with even smaller amounts just like your bank recurring deposit.
Myth #3 It Requires a finance backrgound like a CA or MBA to be successful in Investing
Fact is, you don’t need to know everything or have experienced at all before starting out.Keep in
mind that you can always start from where you are.An interest to keep learning is more essential than
knowledge.
Myth #4 I need to track the stock price every day
If you are investing in markets, you may need to track the business performance once in three months
when it announces quarterly results. If you indirectly invest via an equity mutual fund probably you
may need to review the performance annually or semi annually. You can also opt for advisors who can help you in this process.
Myth #5 I am too old to invest in markets and take the risk
Today with falling bank interest rates, senior citizens who used to get high interest rates are worrying about their future. There are very low risk opportunities to safely gain around 10-12% p.a. by investing in equities. However this would require a careful analysis to select stocks or mutual funds based on your risk appetite. Remember Warren Buffet made 90% of his wealth after the age of 60. Age is just a number. With improvements in health care a retired individual can live easily till age of 90-100. This means they need to plan atleast 30-40 years post retirement expenses for self and spouse.
Myth #6 I think stock market is risky and have seen many people lose money in it
Risk comes when we invest money without a proper understanding. There are certain rules of investing
and stock selection. Those who lose money, mostly have broken the rules and have lost money. The
successful investors keep learning to manage the risks and thereby create wealth.
Myth #7 I am already successfully having a business, why risk in stock market
Every business has its ups and downs. Stock Market helps a business owner to diversify his risk and
thereby create wealth for his family without solely depending on the growth of his/her business
alone. Also it is a way to leave a legacy for your family and also to organisations who you want to support.
Myth #8 I can take care of my goals just by investing in Fixed Deposits, Real estate and gold
Today real estate prices are high, and it with demonetization and RERA many feel real estate prices
will correct further. Also liquidity in real estate is very low, especially when you want to sell
immediately. Gold, has historically kept in pace with inflation, but has not created a huge wealth in long run. Thus it is important to allocate some money to equities to create long term wealth
Myth #9 If someone is successful in investing, why should they teach about it
When I teach, I also constantly keep learning and it helps me to become a better investor.Teaching
for me is a way of giving back to the society what I learnt by trial and error. It is easy if you
learn from those who have done it practically and have the experience. This can save time, money and energy in your journey towards financial freedom.
Before you get in the world of Investing you need to get educated.Education is empowerment. As you
learn more, you will naturally make better decisions.