Why Do You Loose Money in Stock Market?

Why Do You Loose Money in Stock Market?

It’s been the choppiness of stock market which is blamed for wealth destruction; comparing it to a parallel dilemma it’s only human behavior responsible for such destruction. Investor/Trader usually expects higher returns from stock market which ultimately veins in greediness and over genuine expectation. Many attentions have been considered by investor/trader to try their fortunes.

Most common attentions which a trader/investor doesn’t consider are:

Unsuccessful attempts of Top fishing/Bottom Fishing:

Under top fishing investor speculates that withdrawing money from stocks which seems to be over-valued or looks promising for a due correction; On the other hand under bottom-fishing investor speculates that the stock’s depressed price is temporary, will recover and make for a profitable investment.

Non consideration of loss bearing capacity:

We understand risk as the odds for loss incurred then risk bearing capacity is the capacity of an investor to bear such losses. Usually, most of the investor never calculates their loss bearing capacity, moreover they only calculate the quantum of loss but they never book in un-favorable situation.

Biased views over stock/underlying:

Perhaps the most important lesson to be learned here is to retain a sense of perspective. While it’s easy to get caught up in the latest news, short-term approaches don’t usually yield the best investment results. If you do a thorough job of researching your investments, you’ll better understand the true significance of recent news and will be able to act accordingly. Remember to focus on the long-term picture.

Stubbornness for awaiting favorable situation:

Over and over again a investor only thinks about the situation to do come in favor of himself and acts Ir-rationally. Most of the times a investor find himself puzzled into such situation. As like when a firm releases any price sensitive information the market will react to this information by adjusting the firm’s stock price. This stock price is based on the expectations of investors; they are also a factor that could change a stock’s price very quickly; may not be according to expectation of sole or few investors.

– & a lot more.

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