MYTHS AND FACTS
There are many myths in the market let's understand them
1.
Stock market is all about
speculation: we already knows that there are speculators in the market.
Speculators plays very important role in the market as they create artificial demand
and supply that is why prices of share fluctuate.
Investing and creating wealth should not be confused with
speculation. Over the long term, a company is supposed to be worth the present
value of the profits it will make.
2.
The share market is only for
rich people: this statement is true only when market is accessible to very few
people but nowadays due to internet share market is accessible to general
public. Hence market cannot be influence by big investors only.
3.
Buy on dip, it will go up: this
is the common myth in the market, where people think buy share when it falls.
Think of this in terms of the Wall Street adage, "Those who try
to catch a falling knife only get hurt."
Investing is different from trading because investing involves in-depth analysis of firm but sometimes amateur investors’ falls in of saying buy on dip. Hence one should invest only after analyzing every aspects of company whether their share prices are increasing or decreasing, goal must be that share price should be reasonable.
4.
One needs a large amount of
money to start investing/trading in share market: there is no restriction in
how much money you have. Nowadays anyone can start investing with only 500
rupees.
5.
Anyone with some knowledge can
be good trader or investor: A Little Knowing something is generally better than
nothing, but it is crucial in the stock market that individual investors have a
clear understanding of what they are doing with their money. Investors who do their homework are the
ones that succeed.
An
investor who lacks the time to do extensive research should consider employing
the services of an advisor. The cost of investing in something that is not
fully understood far outweighs the cost of using an investment advisor.
If you want to do
great in share market then it will take time and effort. Otherwise you will
become a victim in this field.
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