You probably know how profitable it is to invest in stocks but investing in stocks is not an activity where you could be a millionaire overnight.
Some common misconceptions in stock investing are:
1. The time horizon in stock investing.
2. Stock market is unpredictable! I could lose all my money!
3. You need to be rich, super intelligent and spend a lot of time in stock investing.
Time horizon in stock investing
One critical mistake that most people do is treating the stock market as a slot machine or any form of gambling; they invest in the hopes of doubling their money in a short time such as 6 months or even 2 weeks after they invested. Although some would claim making money using this method (and we here respect that) conservative individual investors should not invest their money which they would need in the next three years.
The stock market may fall more than 40% from their current value. Just this 2008, JFC fell from P50 on September 2008 to as low as P35 by the end of November,
a decline of 30%. Should you panicked and sold your shares at a loss you could have missed it bouncing up to P70 by June 2010 making a substantial gain of 40% should you purchased it P50 per share.
Stock market is unpredictable! I could lose all my money!
Yes stock market is unpredictable and we believe that no one can predict where the market would be going in the next few days. But hey! We are not to predict the whole stock market! We are only to worry about the stocks we invested in. With the basic fundamentals (to be discussed on a later date) your investment should be doing good and the risk involved would only be minimal.
You need to be rich, super intelligent and spend a lot of time in stock investing.
Before we proceed please answer the following yes or no questions.
Have you:
1. Eliminated all your debt?
2. Allotted P3,000,000 for stock trading?
3. Finished your MBA when you are 16 years old?
4. Quit your current job to focus on trading stocks?
5. Bought…
