In Part 1 of this series of investment myths I have exposed 5 investments that have been held by a number of people who could have made as much money as they could with their investments. They are:
The stock market must go to make money poker pulsa.
Stock market investing is risky.
Over 20 years the stock market always goes up.
The best way to make money in stocks is to buy and hold.
News and research groups have hot stock picks.
I disposed of each of these myths and explained that they are the result of miseducation. The problem with miseducation is that it leads to the misunderstanding of the truth, and as many people have learned over the past year that investing in the world is not financially devastating.
In this article I am going to expose 5 more myths about the world of stocks and investing and share how you can not only correct your mistaken understanding but also profit from your new knowledge.
Myth # 1: Stocks in Investing Like Gambling
Gambling is one of the oldest, most pervasive myths in the stock market. In fact many people do not even realize they hold this belief. Yet unknowingly it appears in their words that things like, “You’re betting the stock will go down” or “You’re betting the stock will go up.”
The idea is that a smart investor is betting on ludicrous. Yet it has crept into an uneducated public to the point that many religious groups and social networks have been led by gambling leaders who believe that the stock market is so riddled with gambling that one could be better off playing the lottery. In fact nothing could be further from the truth.
The real fallacy here is the assumption that the investor is betting. As one who spends his life in the investment community, let me assure you that no smart investor would ever bet. Betting is the exact opposite of what investors do. Investors spend their life learning and educating themselves. Their education was correct. If the investment goes against the investor, the honest investor will still say, “I bet wrong.” The honest investor will say, “What can I learn from this?”
Anyone who proceeds into any area of life without being able to be properly educated as a gambler. But the more appropriate term would be foolish. To illustrate this point, let’s take a person learning to drive. If the person has never driven a vehicle before, they may assert, “Since lots of people do it, so can I.” But the foolishness comes when a person gets behind the wheel and tries to drive a car without first learning anything. We could easily say that this person was gambling with his life, but the truth is it’s simply foolishness.
Investing in the stock market is the same way. Millions of people hear how big money is made in the market. They see cheap stock brokers for ads on television, and one day think, “I can do that too.” Truth is they CAN do it too — but only after they learn how to do it. For the educated investor, putting money into the stock market is an educated, analytical, thoughtful decision. The same action of doing the uneducated investor for And yet is … well, foolish. Becoming educated is the stock market in the best way. Myth: BUSTED
Myth # 2: “Predicting” the Stock Market Is Impossible
Gambling comes with a follow-up myth: “Predicting the stock market is impossible.” Again this fallacy comes down to the lack of education. For YOU, the stock market may be impossible, but not for every person. In fact, the stock market is “predicted” by many investors around the world. The author of this article is one of them (that would be me!). Predicting the stock market is not as mysterious as one might think. In fact the market moves in very predictable, repeating patterns, over and over again. And once a person is trained to watch and recognize those patterns, that person can also predict the next move with reasonable certainty. Myth: BUSTED
Myth # 3: Mutual Funds Are the Safest Way to Make Money in the Stock Market
I suppose to dispel this next myth one must define what “safe” is. My definition of “safe” is to invest in an investment that has the potential to be profitable, not because of market conditions but because of the market conditions. In other words, if the market goes up, I want an investment that can make money. If the market goes down, I want an investment that can make money. Yet mutual funds are not one of those investments. It boggles my mind as to why financial advisors continue to sell these investment vehicles to unknowing would-be retirees. It’s an investment.