Why people lose money in stock market?
“That’s the problems with
myths, they started because someone misinformed of the truth, truly believed in
In theory, everyone is aware that less knowledge of something
is more harmful than no knowledge of it, similarly an incomplete understanding
or interpretation can do more damage than good.
Let us apply this theory to stock market and all that has
been said about it. Earlier there was a dearth of information in the market and
now, there is an abundance of it. As the age of internet dawned upon us, so did
the era of excesses. As a result, we have become too dependent on the judgement
of the search engine. When was the last time, you surpassed the first page of
the search engine to find something. We rely on what we read and presume that
the facts are vetted prior to being published.
“If it is on the internet, it must be true.”
This belief has led to the creation of many myths that still
roam around town disguised as the truth.
It is noteworthy that most of the common notions about stock
market trends are based on myths, a fact that renders it completely hollow. In
retrospective, such misinformation leads to constant demise of probable profits
in the market. When decisions are based on an individual’s perception or
somebody else’s interpretation of events, their success relies on pure luck.
Contrary to popular belief, many investors do listen to the
advice of experts, but fail to follow it. Moreover, even when they do follow an
expert’s advice, they do it without questioning the logic that goes into
forming that advice.
How do you deal with missing out investments ?
Information can be your best friend or your worst enemy, it
all depends on how you use it. The majority
of small investors is unable to recover from losses due blindly following
stereotypes. Lack of education and awareness has caused many investors their
hard earned money.
The thing is a lot of people
are talking about making money in the stock market,but no one is talking about
how not to lose it.
So, basically we are all taught how to fly before actually
learning how to walk properly. The promise of a treasure is made, but we are
never taught how to read the map to it.
There is a huge gap in the market, one that has been ignored
for many years.
# Lack of educators
as well as students
There are many preachers, but not enough teachers
available. There are courses that enable you to perform a technical analysis,
but nothing that allows you to be updated. There are either experts or amateurs.
structure of information
The data available to the investors is either
presented in a form too technical for the average investor to understand or
just ramblings of self-proclaimed mavens. There is no structure that speaks to
an average investor in a language they can understand, but also provides them
with real information.
# Conflict of
The interest of the investors is kept subordinate
profit by individuals as well as companies, this creates distrust among the
investors which does no one any good.
When there is a crack in the wall, it should be filled.
Therefore, at this point, what is needed is mentors who desire to educate the investors
and not just earn from them. At the same time, we need investors who are
decisive. If you put your money in it, put your brains in it too- all in or all
There has to be a peripheral shift in the emotion behind the
discussions, instead of complaining about losing money, the investor needs to
understand why that happened. If you know what went wrong, you can try to avoid
it next time.