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Why do most people lose money in the stock market?


Why do most people lose money in the stock market?

The stock market has calmed down by investing money, The number of such people is not less in India and in the whole world. The opposite is also true In other words, many people have become millionaires by buying the right shares. Is it all fate? Or is there any other reason behind it? Let’s find out now, What a common mistake, As a result, people lose their hard-earned money in an instant.

1) Buying shares in the words of a friend or acquaintance:

Maybe a friend of yours said, He made a lot of money buying shares of Bajaj Finance. So you should invest in this fund. You have so much faith in your friend, So he closed his eyes and bought the shares of the company. Bajaj Finance is mentioned here as an example. Suppose the price of the shares of the company starts falling after you buy the shares. In this case, you will lose confidence in the stock market. So don’t buy any shares from friends, relatives or colleagues or after seeing them. The company you are looking to invest in, Check out that company.

2) Lack of research and knowledge:

There is no mention of research here. Research here shows how the stock market works,
There has been talk of lack of education. Sitting in a tea shop at the corner of the neighborhood, There is a difference between reading and understanding the realities of the stock market while discussing the news paper. Nowadays, thanks to the Internet, many online articles, without any help, You can read about these And you can choose the right share for yourself.

3) The greed to become rich overnight:

Many companies promise to double or triple your money in less time. But without knowing the history behind the company, In the lure of becoming rich overnight, Many people make the fatal mistake of pouring all their capital into a weak stock.

4) Lack of patience:

If you don’t invest for a long time, The expected results are not available. There are so many people, When the market is down, Then became nervous, And lost the patience to survive. As a result, he hurriedly sold his shares. Remember, as long as you invest,
The higher the return. As a sapling takes time to grow into a tree, Just like that, you have to give time to increase your money.

5) Invest in Penny Stock:

Penny stock refers to the shares of those Indian companies, Whose market capitalization is below Rs 5,000 crore. The price of a unit of them is less than fifty rupees.  A lot more units can be bought for less money, In this addiction many people do not know about the company,  Penny invests in stocks. But remember, Penny stocks are much more risky. That means you might benefit, Or you may lose all capital. Again, the liquidity of this stock is low That means you can’t sell your stock if you suddenly need it. So without being attracted to low priced stocks, Look at the valuation of the company.

6) Ignorance about market value:

What is the market value of a company, Seeing that, the growth of that company
And the future is predictable. So focus on quality rather than quantity of stock. Such as Reliance Industries, Tata Consultancy Services, HDFC Bank, Hindustan Unilever, ITC Limited, etc. Companies have given good returns over the past, There is a possibility of getting a good return tomorrow, So even if the price of a unit of these seems comparatively high, These are considered as quality stocks.

7) Confusing the stock market with lottery:

Lottery games have become popular over the ages, Because of the thrill of winning the lottery, It is not in saving money little by little. But the stock market is not a thrilling place, Experimenting here increases the risk a thousand fold.

8) Lack of restraint:

Remember that Warren Buffett, one of the most successful investors in the world, did not build his fortune overnight. Starting at just ten years old, So far he has been investing. At present, at the age of 6, his total wealth is over 100 billion. If he had not been sober and disciplined, So could you build this huge amount of property? He has become rich by investing a small amount of money for a long period of time on a regular basis with low income. There is no shortage of such examples.

9) Lack of proper planning:

Without any planning, many people invest their life savings in a stock. This is a big mistake. Distribute your money in different places That means don’t put all the money in one fund, Divide into stocks, bonds, real estate, gold, etc., So that even if there is a loss in one or two, the balance is maintained with the rest.

10) Day Trading:

Day trading is day trading That means investing for the shortest time. This cannot be done successfully by everyone. If you don’t know enough about the ups and downs of the market, You can’t make a profit by day trading, Rather extreme losses may be incurred. Detailed knowledge, strategy making, regular practice And without market review Participating in day trading is a big mistake. So avoid the mistakes above.
If you want to make a profit in the stock market, it is better to run at the speed of a tortoise.

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