The stock market is the ultimate equalizer of wealth. Various individuals who participate in the said market have made fortunes in trading or investing in this financial instrument. However, it is a fact that not everyone is profitable in this field.
Why is that so, you may ask? Various aspiring market participants head right into the markets without the proper knowledge in the said endeavor.
Here are various reasons why individuals are afraid to invest or trade in the financial markets:
The Stock Market and other financial markets are for rich people.
Many people think that this endeavor is only for millionaires or whatnot, but in fact, it isn’t. You can place as low as 1000 pesos in the Philippine stock market in one of the best brokers here in the country. Although as a starter, it is best to place funds between 30k-50k to experience the market’s impact.
Even if you don’t have enough money yet, don’t let that become an excuse. You can still practice trading or investing through Investa VTrade. It is a platform where you can enact your trades using virtual money.
It is conventional wisdom that physical businesses are more resilient than allocating wealth onto the markets.
It is a fact that physical or traditional businesses create wealth. Although an additional stream of income through the financial markets, along with other investment vehicles such as fixed income assets, etc. is ideal to ensure our longevity in terms of finance.
It isn’t easy to trade or invest in the financial markets.
Indeed, it is. It takes time to be resilient in this craft. The key is never to give up in this endeavor, despite the early losses you will encounter. Mark Minervini, one of the best traders in this world, only started to earn money from the markets after his 6th year in trading.
It is an activity that also tests your emotional quotient. Trading the markets can be an emotional rollercoaster ride at first. Although, if you are committed to learning about this craft, such experience can be eradicated.
Many individuals think that it is a quick-rich scheme; therefore, many individuals lost money in the markets, which has led to many people being afraid of investing or trading as they think that it is precarious.
Engaging in financial markets involves risk. Although, entering the markets without the proper knowledge will amplify the risk embedded in the markets. An aspiring market participant should know what they are getting into, wherein the said individual should be committed to this lifelong activity where continuous learning must be applied.
An aspiring market participant should only invest what they can afford to lose. An emergency fund is essential just in case a black swan event may occur.
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It takes a lot of effort to excel in this endeavor.
Undeniably, an individual should pour their conscious effort and deliberate practice to being one step closer to becoming a professional trader or investor. This doesn’t mean that your eyes shall be glued onto your monitor screens 24/7.
An aspiring market participant should make hardcore preparations before the market opens. During market hours, the individual should only worry about their executions. Even Mark Minervini only spends 50% of his time in front of a monitor.
In conclusion, it is not easy to make money in the markets. Trading is not for everyone, just like any other endeavor. It requires patience, commitment, and hard work, which may deter anyone who thinks that the financial markets are a quick way of accumulating wealth. Indeed, it’s all about sustainability in the long run.
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