Stock market is a terrible place to be in and bet, many people lost their hard earned fortune in crashes, wrong selection of stocks. Its crazily driven by emotions and panic, war, bubbles, news, inflation, recession, expert views … what not? Nothing is certain here. so don’t invest in stock market.
Its not entirely true, But you should not invest in stock market if you have the below mentioned characteristics or traits.
Don’t invest in stock if you are…
Buy cheap stocks
Investing in stock market/ owning stocks increases the longevity of the money you put in to work. Its not the intelligence nor the timing makes your money to grow. Its patience!
Market is a wonderful way to make you financial independent. But stock market is a not lottery ticket to make you one in overnight . Its more of a supermarket were items(stocks) are overly priced, fairly priced , and with discounts. You have to be very choosy when its come to selecting stocks to buy.
Golden Rule: Big money is made by patient investor, not by the impatient one!
All stocks are part of a business. Whether its a great business or terrible on is all together a different topic.
Business takes time to grow, decent growth can be seen after five years. So if business performs, stocks of that business performs well too.
So Decent growth for your investments can be seen in five years , Exponential growth can be seen to your investments after decades and more. To see such growth you need rock solid patience.
If you are impatient , please don’t invest in stock market!
For the impatient , stock market is one Ponzi scheme. but for the patient it has the potential to change one’s life !
Read more about: How to succeed in investing with 2 simple strategies?
If you are kind of investor (speculator) who relies on your cab driver (these days Uber) , friends, colleagues for stocks tips. As per me , You would be better off without investing in stocks.
Imagine you are going to buy a shirt for you, you like the color of the shirt, fabric , texture etc. even the price range is great. But the shirt doesn’t fit your friend properly , so you didn’t buy the shirt. Would you ever do that?
The Stock you own today / planning to buy or buy more can potentially change your life. If the tide is on your side, stocks can give a great start for your future generations too because of your decision.
All this can happen when you start to do your homework, like how you buy a shirt for yourself.
How the shirt fits you perfectly, you need to buy the stocks which fits you! ( you can understand the business).
Even stock tips given by your friend , colleague might be right, but you won’t have the conviction to hold these shares when something goes wrong in that industry, or company . You will sell it on panic!
Doing research will help you to hold through the “thick and thin times”, your research efforts will continuously feed your confidence in holding those shares.
But if you are not ready to put the work, wait for your fortune teller friends and have the gut to play with your money without given much thinking. Please you don’t invest in stock market.
Never research = Don’t invest in stock market.
If you don’t have time and energy to research, you must read this article: why buffett favors Index fund: 3 terrific reasons
Buy Cheap stocks
Another sure shot way to bring disaster to your portfolio is constant hunting and buying of cheap stocks without giving a thought about the underlying business fundamentals.
You have to buy cheap, but it should have value. Combining both these factors forms ” value investing”, it is good.
But thinking buying cheap stocks will rise in price in the near future is nothing less than foolish.
Good things always comes at a price! Be a buyer of value and quality, not of cheap and misery.
If you are thinking buying cheap stocks will make you rich, don’t invest in stock market. Without paying attention to business fundamentals, buying cheap alone won’t help you.
So please don’t invest in stock with such attitude.
There are many possibilities and probabilities are out there in stock market to make you financially independent. But all this factors won’t help you unless you have the right mindset about it.
So don’t invest in stock market without patience! but invest with patience.
Don’t invest in stock market without research ! More rocks needs to be turned to find the pearl!
Don’t invest in stock market for cheap prices/ stocks. Invest in market to buy quality business.
Thank you for reading. Happy investing!