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Main Stock Market Investing Myths

1. Only rich people and stock brokers can make money in the market

The stock market is a place where anyone can make money as long as they know how. The Internet has leveled the playing field even more, by providing access to data and research tools that were previously available exclusively to brokers. Therefore, even ordinary folk with a tiny capital can start small and build their portfolio consistently to earn huge profits.

Individuals also have the freedom to aim for long-term gains, whereas stock brokers do not have that luxury. Most of their investments need to perform well even in the short-term. Therefore, individual investors are at a greater advantage when it comes to making money over the long-term.

2. What goes down must come up

Stocks are not physical objects and they are not obligated to obey the law of gravity. When a company performs well and as long as market conditions are conducive, a stock could keep increasing consistently. There is no reason whatsoever for it to come down when there is no other opposing force acting on it. When a stable company with great products or services is run by efficient managers, its stock prices can keep growing steadily. The overall market trend often prevents that however. And companies that are poorly managed and have a declining stock price, may go bankrupt and never recover.

3. Investing in the stock market is very similar to gambling

While people totally ignorant about the share market can be excused for having that opinion, investors and even novices in the market should never entertain that idea. Gambling is an activity where everything is left to chance, but investing in stocks is done by careful analysis of a company’s performance, market forces, and several other factors that can influence the prices of stocks. Therefore, stock market investing is not a leap in the dark, but rather a careful strategy based on solid rules, analysis and a certain amount of intuition gained over years of experience.

Article Source: EzineArticles.com
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