Investment Talks: Why Investors Lose Money in the Market?
We have interacted with many people who are afraid of plotting their money in the market because they have already experienced the pessimistic face of the market. But, as we digged into the facts in detail we’ve found out that they have faced those consequences due to some of the incorrect investing habits they followed.
Moreover, there are many other reasons which affect the profitability of the investors, and as a result, they lose money in the market. Let’s know about the major one!
- People Lose Money As They Have Least Understanding of the Economic & Investment Market Cycle: Mostly investors in the country have no relation with the understanding of financial and economic talks. But, this is not actually the main cause of facing loss in the investment market. The financial experts and the professionals are there to help these investors as a life jacket to sail in the ocean of investment. These investors can no longer swim even for a minute without the life jacket. Cool enough. It is also not the actual cause. Suppose that there are thousands of people in an ocean, well you can imagine the scene of the Titanic movie too, and no one knows swimming except some 30-40 folks. There were 500 life jackets available on the boat, and before getting jumped into the ocean, the astute ones grabbed the jackets so that they could sail on the water. What do you think now? Who according to you have higher chances of staying alive? Of course, the ones who got the life jackets, and the ones who know how to swim. If you agree on this, then think again the same in a little different way where the market is the ocean, experts act like the life jackets, and you should know that you can swim the ocean or you need to take help of life jackets. So, the entire story points out only those investors who walk on DIY investing concept without having any relationship with economic and financial understanding. In short, it’s like jumping into the ocean to swim without a life jacket despite the inability to swim.
- People Lose Money Because Their Investments Are Emotion Driven: The emotion-driven investing is also one of the major reasons due to which most of the investors lose their money in the market. Understanding the basic behavioral financial concept can help you prevent from losses in your investment lifetime. What most of the retail investors do is follow the herd. But, this concept can work only if some miracle happens, but not in reality. No doubts that one might have even hit the bull’s eye being in the blindfold, but either that one shot possibly be lucky enough or he may gain expertise in doing so. Thus, it is more or less a waste of time practicing such things. Have your own wish, and achieve them. Don’t buy a double door refrigerator just because the neighbor has one. Rather, buy one on the basis of your requirements and abilities. Last but not least, if you too have any such mentality to go with the flow, then change it else you too may face losses in your journey, whether it is of investment or any other.
- People Lose Money Because of the Thinking that Investing Is a Get-Rich-Over-Night Formula: Everyone dreams to wake up rich the next morning. What’s wrong with it? Actually nothing. Dreams are the 1st step to success; if you don’t dream to buy a Ferrari, the urge of buying it will not come to you, and hence you will not even bother about earning and saving more money so that you could fulfill your dream. Yes, we are saying that having some dreams and wishes is important. It helps you to stay enthusiastic and motivated in your life to achieve targets.
Dreaming is good, but beware of daydreaming. Don’t make false expectations, they will only waste your time and push your money towards loss. It has been seen that several new investors enter the market with high confidence to double the money overnight, but later on, they end up with tears. Yes, it sounds rude, but it’s true. So, if you have any such believe that you can become a millionaire overnight, then it might not be the investing that you’re thinking about.
Then, why it has been said that investing can make you millions? Yes, it’s true. One can create wealth and become a millionaire but not overnight. The most important word on which one needs to attain doctorate is “Patience.” It is the only panacea to hit the bull's eye. So, stay away from the rumors and false images. Rather, focus on your target to achieve it effectively.
Try to avoid mistakes which are mentioned above to attain a sustained approach and evade the losses from your investments. However, there are more reasons which influence the profitability of the investors; the above mentioned are among the major ones. If you want to choose the best way of investment that leads you toward profitable world and the best performing mutual funds, then invest through our portal, i.e., MySIPonline. Our entire team works together to help you reach your investment target effortlessly. Register today.