There are lots of misconceptions when it comes to investing in the stock market. Lack of information and bad advice from people that are not so knowledgeable can spook you into believing that the stock market is merely a place to lose money, and it is the club for the wealthy. The stock market is for everyone; you need to be able to separate the truth from the myth. Here are some of the biggest myths about the stock market and the truth behind them.
Stock Market News – Top Stock Market Myths
Stocks that go up must come down
When it comes to the stock market, the law of physics does not apply. Many people believe that just because a stock goes up, it must definitely come down. Stock rise and fall, but this occur due to the performance of the respective companies, and not because it follows a particular law. If a company is selling a superior product/service and is well run, there is no reason why it’s stock value won’t keep going up. Equally, if a company experiences poor management, it may negatively affect its share prices.
Investing in stocks is just like gambling
These two activities are essentially different. Gambling basically involves moving money around and taking risky action in the hope of an easy and quick result. On the other hand, stock means the ownership of a company, and you create wealth in buying them. You can influence the wealth held by a company as an investor
I am not rich, so stock markets are not for me
This is another myth in the mind of many people up till today. But the truth is that with little money, you can start investing in the stock market because there is no fixed minimum level for buying stock.
A little understanding is enough
Generally, knowing something is better than nothing, but it is vital that you have a clear understanding of what you are doing in the stock market. Individuals who do their homework are the ones that succeed. If you don’t have the time to do comprehensive research, you can hire an advisor.