Hi friends,
The world is full of people who will discourage you from doing what they themselves could not do in life. Stock market investing is one of these fields where a majority of the people have burnt their fingers. As a result of this they discourage people who want to take it up as a career.
Since the time I have started my career, I have been jotting down the points as to why people are so scared of the stock markets. Everyone talks about diversifying the portfolio into a mix of debt and equity. But then they forget the last word that they mentioned - "Equity"
For this reason I have made a small list as to why most people lose money in the stock markets:-
a) Greed and Panic- These 2 emotions have ruined the lives of many people. Please understand that the market is not a casino or a place where you can multiply money overnight. At worst, you should expect a return of GDP rate + Inflation rate over a long term (at least 10 years). So in case of India it would be around 15%.
b) Choosing a broker just on the basis of brokerage- A lot of people run after different brokers just because they offer the lowest brokerages. But the only criteria should be whether he is generating profits for you or not. If he cannot manage your portfolio properly and does not understand your financial goals, he is not worth his salt.
c) Herd Mentality- There is a saying " When the masses are asses there is a majority." Only wolves hunt in packs, tigers prowl on their own. It is high time to invest in the biggest gift that God has given to each of us i.e. "Brain" Most of the people do not use their creative faculties and as Boman Irani said in 3 Idiots " Unused brains fetch the highest price", that is why most people do not bother to use it.
d) Multibagger and Penny stocks - Multibaggers and penny stocks are like trying your luck in a horse race. Its better to go to Macau and try your luck. Chances are the same and even if you lose, the experience would be better.
e) Following stock reports updated in magazines and newspapers blindly- The great companies will never be multibaggers. A Sun Pharma or a Colgate would never be recommended as a multibagger because you will make money. There is a joke in stock market parlance multibagger is a company which ensures Multiple Beggars.
Looking forward to your comments and criticism. Its an open forum. If you feel something is incorrect do point out. Feedback is welcome.
Your friend,
Vivek
The world is full of people who will discourage you from doing what they themselves could not do in life. Stock market investing is one of these fields where a majority of the people have burnt their fingers. As a result of this they discourage people who want to take it up as a career.
Since the time I have started my career, I have been jotting down the points as to why people are so scared of the stock markets. Everyone talks about diversifying the portfolio into a mix of debt and equity. But then they forget the last word that they mentioned - "Equity"
For this reason I have made a small list as to why most people lose money in the stock markets:-
a) Greed and Panic- These 2 emotions have ruined the lives of many people. Please understand that the market is not a casino or a place where you can multiply money overnight. At worst, you should expect a return of GDP rate + Inflation rate over a long term (at least 10 years). So in case of India it would be around 15%.
b) Choosing a broker just on the basis of brokerage- A lot of people run after different brokers just because they offer the lowest brokerages. But the only criteria should be whether he is generating profits for you or not. If he cannot manage your portfolio properly and does not understand your financial goals, he is not worth his salt.
c) Herd Mentality- There is a saying " When the masses are asses there is a majority." Only wolves hunt in packs, tigers prowl on their own. It is high time to invest in the biggest gift that God has given to each of us i.e. "Brain" Most of the people do not use their creative faculties and as Boman Irani said in 3 Idiots " Unused brains fetch the highest price", that is why most people do not bother to use it.
d) Multibagger and Penny stocks - Multibaggers and penny stocks are like trying your luck in a horse race. Its better to go to Macau and try your luck. Chances are the same and even if you lose, the experience would be better.
e) Following stock reports updated in magazines and newspapers blindly- The great companies will never be multibaggers. A Sun Pharma or a Colgate would never be recommended as a multibagger because you will make money. There is a joke in stock market parlance multibagger is a company which ensures Multiple Beggars.
Looking forward to your comments and criticism. Its an open forum. If you feel something is incorrect do point out. Feedback is welcome.
Your friend,
Vivek
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