In a year, most people overhear hundreds of tips, suggestions, rumors and can’t miss recommendations about the stock market in general or specific stocks. Unfortunately, in most cases, what you hear is wrong. That’s because, unless the person conveying the information is an experienced trader or industry professional, you can’t rely on the source.
What are some of the most repeated pieces of misinformation that can lead otherwise well-intentioned new investors astray? Most are related to either very pessimistic or overly optimistic statements. Extreme statements are usually incorrect. As you would dress for success as a part of your job interview prep, you should research a well-rounded collection of information on the stock market before diving in. Here are four things you’re likely to hear if you listen to what people say at social functions and in online discussion groups. We supply both the myth and the facts related to it.
It’s a Zero-Sum Game
The old zero-sum myth has been around a long time. It proposes that there is a loser for every winner, and new practitioners thus stand to lose all their funds to more experienced folks. The truth is the securities markets are not zero-sum propositions. Companies exist to create wealth, and in many instances, nearly all people who purchase a particular stock earn a profit. So it’s not a case for every winner; there’s a loser. That might be true in card and casino games, but it’s not the case in corporate share ownership and investing.
Day Trading is Dangerous
Day trading can be a winning or losing proposition, depending on how much a person practices and manages their funds while learning how to trade this way. Those who rush in with no preparation, assuming they can become wealthy in a short period, are bound to fail. However, following a best practices approach, day trading for beginners and experienced individuals can be a profitable and exciting endeavor. The best way to get started and prepare your mind for this effort is to review a day trading guide specifically written for those new to this form of investing.
You Have to be Rich to Invest in Stocks
Most people who buy and sell corporate stock shares earn average incomes and are not wealthy. However, if you want to begin day-trading with as little as $500 of startup capital in your account, you can learn a lot by viewing a video that explains all the pertinent information for newcomers. Simply see this video, and you’ll know all the essentials about day trading.
You’re Better Off Investing in Gold
This is a prevalent myth, and it’s been around for decades. Long-term market investments tend to do just as well or better than gold and other precious metals. It’s true that when the exchanges have a bad month or two, metals prices might rise. But, in the long haul, a diversified portfolio of primary stocks and a small amount of gold will perform much better than one that contains only gold.