Even though Retail investors are entering into stock markets due to surge in work from home culture, even today there is a strong belief among many that-
- Stock Markets are Gambling
- Investors always loose money in stock market
- Stock Markets are only for big shots(Rich People)
- We Need to book Profits Periodically otherwise your Profits would be wiped out
These are a few misconceptions revolving around the market circles. Keeping these misconceptions aside, what retail investors should notice is-
- Stock Markets are not Gambling; It should be played gradually with tatical skills
- Don’t copy investment portfolio from others; It should be decided on investors risk profile and risk taking capability
- If you are a newbie to stock market, don’t invest in one-go, you should invest gradually and systematically
- Don’t believe that “Stock Markets are only for high networth people and corporates. Even a small retail investor can invest in the markets but he/she should invest gradually until he understands the working nature of stock markets”
- Make sure “Stock Market Returns are not Guaranteed. Your Returns will depend on the market conditions”
Retail Investors if you accept the above factors with sole heart, then you will definitely succeed in stock market. What you have to understand is-
- Markets behave irrationally. So their returns are not guaranteed
- Due to its volatile nature, share prices moves up and down irrationally. You should be “Tatical” in choosing a stock
- Investing “More” when the markets are in “Bull Phase” and “selling your investments when the markets are in bear phase would ruin your returns”.
- Don’t invest in stock market with high interest debt. If market corrects, your investment value erode and you will fall under huge financial crises.
The reason why most investors treat stock market as “Gambling” is- They invests more with “greed” in bull market and “sell with fear of loosing capital”in bear market. Almost 99% of the investors do this and burn their fingers in the stock market.
Even though all stocks don’t gives profits at all times, as said before “Stock Market is a Tatical Game”. It should be played with tatics depending on the market movements. During this process control your emotions(Greed and Fear)while reacting to the market conditions.
Do remember- Markets are always volatile and behaves irrationally. Our “Buy and Sell” Decisions will decides your investment returns. Market swings in its own way. Your “Entry and Exit Points” will decide your returns.
This investment behaviour of selling in down-turn market and buying more in bull market is the ultimate mistake every investor is doing and blaming stock market is “Gambling”. Do remember your “Entry and Exit Points” and “Patience” decides your returns.
If you have tatics to choose best “Entry and Exit Points” of a share and holds with Patience, then you will be a successful investor. It’s your investor behaviour decides your wealth. so- Don’t Blame Markets For Your Actions.