Top 7 mistakes investors do while investment? Why only few people become successful in the stock market?

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Stock market is not gambling bazar its a professional market. To become successful in stock market needs skills and strategies but its not that much hard. You don’t require advance math skills to make wealth from stock market just need to understand simple funda before investing. In this article we will understand what are the mistakes that investors do while investing.

The following are some of the mistakes that investors do while investing money in the stock market.

1. Emotional Attachment

Emotions can kill the investor’s money. The stock market is very discipline and deep area. To achieve success in the stock market investors should emotional attachment towards investment. When the stock price is falling investors should check the reason behind the fall but instead of analyzing reasons investors believe the stock will rise one day again but that day never comes. There is always a reason for the rising and fall of the stock price.

Stock se Pyar mat kero business kero.

Investors should not attach with stock instead of that investors should look into the fundamental of stocks.

2. Importance of Exit

One of the crucial decisions in investment is when to exit. Exit point on profit booking or on loss booking on both stages very crucial to decide because the wrong exit can turn return ratio. Many time investors when profit comes they book early and when loss start they wait until stock rise. Investors should analyze the upper and lower both sides. In the market, everyone says entry point with confidence but when the time comes to say exit point no one says. Investors should track periodically stock price and fundamentals so the right decisions can be taken at the right time. It needs the courage to book losses. One of the recent examples is Yes Bank many investors keep invested in the belief one day stock will rise and everyone knows the current stock price is near to 20 Rs so if investors have taken the decision when fundamentals are weak than the loss may be less.

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3. Instant Money Mind

The Stock Market is not gambling so don’ come with instant money mind. To create wealth from the market needs patience.

There is one famous line………….

“If you don’t have patience in the market you will become patient in the market”.

One of the most successful concepts in the market is Coffee Can investment. Before many years people stored their money in a coffee can and forgot it for many years and after many years’ they saved lots of money. The same concept applies to the stock market invest and forget. Don’t completely forget to check periodically.

4. Averaging

Investors should do averaging based on company financial performance and qualitative information rather than on belief that stock will rise one day. One of the recent example is Yes Bank many investors just keep doing averaging without checking financial performance and at the end everyone knows the results.

5. Neighbour Choice

Neighbor choice means making investment decisions on the basis of in which stocks other investors or friends or relatives invested their money. Many investors just follow other people stock recommendations without checking the financials of stocks. Don’t just blindly believe in others you don’t know they also got from others and that cycle continues. 

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Investors should check the background of person s=who recommending stocks. Before investing into particular stocks investors should analyze qualitative and quantitative data.

6. Attractions Of Trending

Attraction can also kill investors wealth.

Example Ramesh invested X money in XYZ stocks at some date. The current market price of XYZ stock is below Ramesh buying price. Ramesh gets to know that ABC company continuously performing very well from the past week so Ramesh decided to exit from XYZ stock and invested money into ABC stock but unfortunately after sometime ABC stock started falling and the same time XYZ stock started rising.

The thing is not focus on short term market movement if you are investing for long term purpose. Many investors hyper by short term market fluctuation and they continuously change there stocks. Investors should stick to company financial performance and qualitative data to remain invested instead in particular company.

7. Mouth Investing 

Mouth investing means investing in the stocks that are on every investor or news or media word. We can say operator base stocks. Don’t invest without knowing the reason behind stocks why stock is continuously rising. In operator base stock retail investors mostly make losses.

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One famous investor said that if you want to select the right stock select stocks that are not on the radar of experts, research houses, media, or news. So find under dog stock.

Thanks For Reading

Note: All the above information is just for educational purpose only.



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