Stock Market Beginners: Worst Assumptions From Stock Market Beginners

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Many people who assume that they invest part of their savings in the stock market can achieve high returns in a short period of time. This common assumption has blindly encouraged many people to start this particular investment without any knowledge or experience. So there are a few more assumptions that beginners often make.

Stock investment advice from your friends or colleagues is always reliable

Rumors instigated by speculators often confuse investors when choosing the right stocks. FYI, if you choose an unsubstantiated point-based stock, at some point you will be frustrated by the outcome of the stock’s performance. Buying and selling stocks is done solely by common sense and radical decision making.

You have read many investment books written by famous investors.

Typically, information in investment books can enhance your knowledge of investing in stocks. Also, this particular investment requires no skills or talents. Practically, you will be able to make money from this investment if you are able to understand the fundamentals of stock trading. However, reading many investment books does not guarantee success in stock trading if you do not apply your knowledge wisely.

I will be able to get high returns if I invest a lot of money in it

This particular investment is really risky, as no one can predict whether a stock will rise or falter within a certain period of time. Investing in the stock market requires fundamental and technical analysis. Fundamental analysis is typically used during the evaluation of stocks when trying to measure their intrinsic value. On the other hand, technical analysis: a method of evaluating stocks that focuses on their past prices and volumes from the charts.

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