There is a ton of hype in the stock market. Many “Guru’s” talk about how they can double their money in just 1 month with little effort and only with a easy to follow system. It is no wonder why so many people believe that they can just get into the stock market and start making bucket loads of money overnight.
There are, however, a few things that new traders tend to overlook when entering the market.
1. There are Bumps in the Road
There are so many stories about Guru’s and stock traders who have turned just a few thousand dollars into millions of dollars in just a year or two. This is great, but it doesn’t mean that you can just jump into the stock market and expect the same results.
Great traders can consistently beat the S&P 500. Given the fact that the S&P goes up on average 10% a year, if you can make 20% or more then you are considered to be a fantastic trader. Given that fact why do so many people assume that they will come in and make a 400% return their first year of trading?
Trading is a game and it requires practice. If you want to get good at it, it requires work.
2. Losses Occur Too
People tend to be in a state of “Ah” when they see a professional trader who has made a 300% return on a trade in just a short period of time. While it is possible to see trades like that, there are also losses that occur in the market.
Out of that 300% return it could be that 2/3 of it was simply recouping losses and when everything is said and done they may just be a little up for the month.
3. Not Everyone is Suitable to Trade Stocks
Although most people are probably capable to become a trader, not everyone will stick to it and keep at it through all the ups and downs in order to keep learning and improving. Just like in business most people will fail at it. Only those who will keep going can see everlasting success.
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Topics: Stocks Mutual Funds | Comments Off
MLA Style Citation:
Rosenberg, Shaun "What People Forget About Stocks." What People Forget About Stocks. 23 Jun. 2010. uberarticles.com. 30 Sep 2014 <http://uberarticles.com/finance/stocks-mutual-funds/what-people-forget-about-stocks/>.
APA Style Citation:
Rosenberg, S (2010, June 23). What People Forget About Stocks. Retrieved September 30, 2014, from http://uberarticles.com/finance/stocks-mutual-funds/what-people-forget-about-stocks/
Chicago Style Citation:
Rosenberg, Shaun "What People Forget About Stocks" uberarticles.com. http://uberarticles.com/finance/stocks-mutual-funds/what-people-forget-about-stocks/
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