Common Myths about the Stock Markets

The term stock market usually paints a complicated picture to a lot of the general public. As such, there can be a lot of misinformed facts and myths about the stock market itself. Knowing about the common myths should shed some new light for you as an investor.

The stock market is a great place to put your money in the long run. Historically, stock market investments make a bigger return than cash deposits, bonds or savings accounts. But a lot of people do not invest in the stock market or are afraid to because of certain myths. And because of these myths, they end up losing out on the many great stock market opportunities out there! So here are some of the most common myths that people have about the stock market:

1. The stock market is risky. Think about how many people you have heard saying they would never invest in stocks because it’s too risky?  The fact is- It is risky for most people because they have no idea how to invest and they simply put their money into some hot stock people are telling them to. The moment you treat stock market like a casino, you are gambling, which is risky. However, if you know how to invest and you do proper research and analysis before you put your money in, stock investing is not risky! In fact, you will probably make very good returns on your investments. 
2. Investing in the stock market requires a lot of money. This is one of the most common myths that prevent people from entering the stock market. You don’t need a million rupees right now to start investing. You can start investing right now for as little as a few thousand rupees. Sure, you may be starting small now, but eventually with the right skills and investment decisions, you can grow that few thousand rupees portfolio into a million rupees one in due time.
3. Stock markets are complicated. Yes, investing requires some homework, but just because you may be unfamiliar with it now doesn’t mean it’s complicated. You can always learn more about investing, just like learning how to drive a car, i.e., the more you do it, the better you become at it. It is easy to see why most people get the impression that stock markets are complicated. This is because stock pundits are often busy reading stock charts, discussing principles or theories and speaking in stock market lingo. As an investor, however, you don’t need to know all of this lingo and even if you come across it, you will pick it up eventually. What’s more important is that you know how to pick the right companies and invest in them at the right time to allow your money to grow for you.
4. Stock market investing can make you a millionaire overnight. The first rule when entering the stock market is to set realistic goals. A business point of view is a must. Ultimately, buying a stock is like buying a business. Once you have this perspective, you will understand that stock markets cannot turn you into a millionaire overnight. You cannot start a business right now and get a million rupees for it tomorrow. It must be given time to mature.

So, these are some of the most common myths which people have about the stock market. Remember, keeping a healthy perspective leads to healthy finances. Happy investing!

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