There are many myths surrounding the stock market that mystify the process and hinder people from putting their money into investments. Here are five of the most prominent, and why they are untrue:
Only Rich People Should Invest in the Stock Market
The assumption that only rich people can and should be investing in the stock market is built on an entirely false pretense. Even if you do not have a lot of money that you would like to invest, there are many options for small-scale investments. For instance, you can invest in penny stocks or work through discount brokerages, both methods of investing which allow you to buy in for a minimum cost.
There are also many mid-cap stocks and stocks for under twenty-dollars, which are attainable for investment by the masses without posing a dramatic risk.
Only Experts Should Invest in the Stock Market
This is a myth that impedes a lot of people from investing. The stock market is something that is accessible to people of various knowledge bases, and it is easy to get information and advice from the internet in order to build up a confident understanding of how the stock market works before moving forward.
In a time when the internet is readily available, anyone can find and access the information to become well versed and gain experience in the stock market. There are also websites like The Stock Market Game, which allow you to invest fake money with no risk to get practice before you dive into the real deal.
Market Forecasts Are an End All Be All
It is easy to just go with what leading market forecasters are saying, but it is important to know that they are not omnipotent, and can not always be right. It is even more important to do your own research into the companies you would like to buy stock in.
Stocks Follow Predictable Trends
There is no guarantee that stocks that are falling will continue to fall. There is no guarantee that stocks that are rising will continue to rise. The stock market is unpredictable, and looking at numbers and trends do not ensure a positive outcome, just the chance of a positive outcome.
Investing in the Stock Market is the Same as Gambling
Although there is always a risk when investing in the stock market, it is not akin to gambling in any way. There is much more research involved, you can pull your money at any time, and you have more agency over your money based on your decision-making process.