Common Myths of Stock Market

What are Common Stock Market Myths?

- Investing in Stocks Is Just Like Gambling- 

• This reasoning causes many people to shy away from the stock market.A share of common stock is ownership in a company. It entitles the holder to a claim on assets as well as a fraction of the profits that the company generates. Assessing the value of a company isn't an easy practice. 

• There are so many variables involved that the short- term price movements appear to be random; however, over the long term price movements, a company is supposed to worth the present value of the profits it will make. In the short term, a company can survive without profits because of the expectations of future earnings, but no company can fool investors forever - eventually a company's stock price can be expected to show the true value of the firm. 

• Gambling, on the contrary, is totally different. It merely takes money from a loser and gives it to a winner. No value is ever created. By investing, we increase the overall wealth of an economy. As companies compete, they increase productivity and develop products that can make our lives better. Don't confuse investing and creating wealth with gambling's zero-sum game.

- Stock Market is an exclusive family of brokers & rich people-

Many people think Stock Market to be an exclusive club of brokers and rich peoples. The fact is that almost every study done on this topic has proven that these claims are false. Most market prognosticators are notoriously inaccurate; furthermore, the advent of the internet has made the market much more open to the public than ever before. All the data and research tools previously available only to brokerages are now there for individuals to use. 

- Stocks That Go up Must Come Down-

The laws of physics do not apply in the stock market. There's no gravitational force to pull stocks back to even. It's not the fact that stocks never undergo a correction. The point is that the stock price is a reflection of the company. If you find a great firm run by excellent managers, there is no reason the stock won't keep on going up. 

Thus there are Technical Analysis software's readily available in the market and with the help of some Real Time Data Service Providers like www.rtdsdata.com, one can easily uncover the stock market myths and trade far more easily and realistically and generate maximum profits. But we have to use caution regarding the same while choosing the Service providers.

- A Little Knowledge Is  Always Better Than None- 

Knowing something is generally better than nothing, but it is crucial in the stock market that individual investors have a clear understanding of what they are doing with their money. Investors who really do their homework are the ones that succeed.
Don't get anxious, if you don't have the time to fully understand what to do with your money, then having an advisor is not a bad thing. The cost of investing in something that you do not fully understand far outweighs the cost of using an investment advisor. 


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