Decipher 5 common myths on the stock market
Investors often approach the stock market cautiously and hesitantly, or simply dismiss the idea as “budgeting.” The reason behind this is because of misconceptions and misconceptions. about the stock market, this makes potential investors tend to stay away from the market, missing out on great financial opportunities.
If you’re also considering investing but are held back by too many thoughts, here are 5 common stock market myths.
1. Investing in stocks is the equivalent of gambling
This reason makes many people afraid of the stock market. To understand why invest in stocks inherently different from gambling, first it is necessary to review the meaning of these two forms. Stock is a type of security that confirms ownership of shares by the issuer. Often, investors think of stocks simply as a means of exchange and they forget that stocks represent ownership.
In the stock market, investors are constantly trying to gauge the return that will be left to shareholders. This is why stock prices fluctuate. The outlook for business conditions is always changing, and so is a company’s future earnings.
In contrast, gambling is a zero-sum game. Gambling merely takes money from the loser and gives it to the winner. No value is created, while the overall wealth of an economy increases through investment. As companies compete, they increase productivity and develop products that improve lives. Investing and creating wealth should not be confused with the zero-sum game of gambling.
2. The stock market is a club dedicated to brokers and the rich
Most people think of the stock market as a place only for the experienced or extremely wealthy. However, they do not realize that to have experience, you also have to go from zero. Besides, to start investing you only need a capital of about 5 million VND – a level that most people can cancel.
The Internet has also made it easier for us to access information and investment tools. Securities companies also have many policies to make it easier for beginners. So the stock market is not just for the rich as many people think!
3. You can only make money by investing a lot of money
This myth stems from the belief that in order to make a profit, one must have strong financial resources to still be able to “survive” after losing investments. investors with many types of capital and individual risk tolerance.
You can research and invest in less volatile, low-risk stocks if you are a safe bet. It’s important to find the company’s stock that aligns with your investment strategy. That means you have to research carefully and have Investment plan to minimize damage in the first place
4. High risk means high return in stock market
Some of the high-risk investments in the market can give you short-term returns at times – depending on the stock you choose. However, not all of these investments are always highly profitable.
In fact, high-risk investments offer as much chance of losing as winning. Any investment requires prudence, patience and research to be able to place trust.
5. A little knowledge is better than none
Knowing something is often better than nothing. But it is important in the stock market that individual investors have a clear understanding of what they are doing with their money. Sometimes “knowing a little” can make it easy to lose all your money.
Therefore, improve your knowledge every day. In particular, have at least basic knowledge when making your first investments. Otherwise, what you are doing will be like playing a game of chance.
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at Blogtuan.info – Source: Kenh14.Vn – Read the original article here
