Why People Lose Money in the Stock Exchange Market?

in Project HOPE2 months ago

I am sure you are used to a lot of videos on YouTube or other Vlogging platform where you are made to see that investing in the stock market is the easiest way to make money. You must have heard this phrase before “Invest in the market today”. It is no doubt that a lot of people are conversant with the stock market but then I ask a question ‘’Why do we have more people losing money than more people gaining money on the stock exchange market?” if the stock market was a ground filled with gold, why do people then come out with blood on their eyes?

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The fact remains that, the stock market isn’t an easy ground to invest as it is being painted by people who want to make money either as brokers or promotion in their video. In this post, I will be looking into why people are not making money in the stock market.

Trade and invest are two different things

There are very few stock investors that lose money but there are a lot of stock traders who lose money. The fact that you buy and sell stocks on the stock market doesn’t make you an investor, because a trader is a person who buys stocks for the purpose of selling on a short run so as to capitalize on little profit while investing is buying stocks for a very long time (over a year) with the intention of making capital gains on stocks as a result of both the company and the stock having the ability to perform well. While a lot of people lose money in the stock market is because they aim to trade but think they’re investing.

The Way Down is up and Vice versa

I was talking to a friend and he said he lost a lot of money in the stock market after buying a stock that was soaring high. He said he bought the stocks because the news made him feel like the stocks were never going down and people were looking positive about the stock. Then I replied to him that the time to buy is when the stock is down or when people are saying the stocks is irredeemable while the time to sell is when people are saying that the stocks have no plan of crashing anytime soon.

Conclusion

The stock market is a ground for both traders and investors and if you are a trader, then it is a ground for profit and loss. Do your due diligence to consult your financial advisor as your investment is your personal risk, and you can part or all your money.

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I see that as a profession. It's not a question of betting to see if it goes up or down, you have to dedicate time to investigate, to read, it's always a risk even if you know what you're going to do, but more risk is when you don't know anything about it, because the possibilities of losing would be even greater...

If you love reading charts and speculate, a good way to make a profit.