If you are someone who is starting out in the share market, beware of the advice you take and don’t believe everything you hear. Checkout our presentation to know some popular myths about investing in the share market.
Understanding and avoiding various stock market myths can make a substantial difference in wealth over your lifetime of investment journey. Hence Kotak Securities brings you various stock market myths that are around today to make you aware. Visit http://www.kotaksecurities.com for more information
Share Market Myths
Share Market Myths
Share Market: Dealing with the devil?
• The share market and all things associated with it are often seen by many
people as something bearing a huge hidden risk. That’s really not the case.
• Yes, there is risk, but quite frankly, dealing in the market doesn’t mean
you’re dealing with the devil.
• Here’s a list of 10 myths about the share market.
Myth #1: Stocks = Risk!
• That’s not true. The main function of stock investment is wealth creation.
Investing in stocks sensibly over a long period helps create wealth for the
investor. The key to investing in the share market is discipline. Learn to build
a portfolio that offers you steady growth and diversify your holdings. Any
investment carries with itself an element of risk.
Myth #2: No Broker = No Profit
• The reality is that the working of a stock market is not the simplest thing to
understand. Hence, if a person takes some time out to actually understand
and gets to know the manner in which the market works, he would naturally
stand to make some gains out of it. You do
however need to invest some time in it
and with experience; you’ll become a
Myth #3: Buying Stocks = Gambling
• One of the oldest and widely circulated myths about the market is that
venturing in is nothing more than gambling. The biggest function of equity
market is wealth creation whereas no wealth is created in gambling.
Myth #4: No Market for Old Men
• Age has nothing to do with your competence in the stock market.
Regardless of your age, you should pick healthy, growth-oriented
companies to ensure a profitable portfolio.
Myth #5: You don’t need to know a lot
• If you want to succeed in the market, you need to know everything there is
to know about the stocks you’re investing in. Warren Buffet endorses the
fact that you should know everything about your stocks and the sector. If you
hire a good investment advisor, he will always be on top of the knowledge
game and offer valuable advice.
Myth #6: Always buy when stock price is low
• This is not true all the time. Please don’t assume that stocks which are down
will rise again. There are no guarantees of the same.
Myth #7: Always sell when stock is rising
• As with the previous point, this is again not true all the time. If stocks are
rising, the outlook may be promising for the company and it may move on to
bigger things. Thus, it may not be the best time to sell the stock.
Myth #8: Fallen stocks will rise again
• This is an area where many investments falter. This is not true at all. There
are a host of reasons as to why stocks lose their value. Intrinsic, as well
as extrinsic factors are responsible for the fall and as a result, there is no
guarantee that fallen stocks will pick up pace and rise in value.
Myth #9: Stocks that have rallied will fall
• If a business is doing fine, there’s no reason why its stocks should tumble
on day. There might be some movement on a daily basis but that’s merely
an indication of certain relevant factors in the market.
Myth #10: Market forecast should be precise
• Even Nostradamus couldn’t predict the fortunes that lie in the stock market;
Case in point - SENSEX. While certain things can be deduced, the market is
not an exact science. As an investor, patience is the key – long-term plan
has been seen to create more wealth over short-term gains.
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