Have you ever heard of the stock market? If you have listened to, then you will know why most of the people who invest in the stock market are harmed. But do you know that some people earn a lot of money from the stock market?
So would you like to know that this happens? So here are some of the reasons why the stock market is damaged — reasons and causes of loss in the stock market – 7 Big Reasons for failure in Share Market.
If you understand the stock market well, then you will not be corrupt in it, but you can also earn good profits from the stock market, and if you have thought without thinking you may have to suffer loss.
So you should know and understand the reasons for the loss in the stock market. Here we are telling you 8-10 reasons for the decline in the stock market.
Seven big reasons for the loss in the stock market
If you learn about these mistakes (or causes) and avoid them, then you will also come to some people who earn good money by investing in the stock market.
1) Investing without learning:
The first and foremost reason for the loss of the stock market is that people do not learn about the stock market before investing in the stock market.
People do not realize that for the job or business they are spending their lives today, they have studied at least 12-15 years of work and hard work.
So, to get a good return on that money, can not even take a few days to learn about the investment? If you want, you can teach it a little bit every day.
But people do not do this, and they invest in something without adequately doing it, and then they are harmed. So you must save yourself from this mistake and spend your time learning.
Never invest in anything that you don’t understand.
– Warren Buffett
Because lakhs of rupees are better than doing the same damage, investing some money and time, learning about investment. By which you can save millions of rupees.
2) Investing in an unexplained business:
There is another reason for the loss in the stock market, invest in a company that does not understand the business.
Many people make such a mistake that they are a doctor, but they want to invest in a bank’s stock while they should invest in pharma companies whose business they have full knowledge and understanding about.
It is not that a doctor can not be able to analyze the bank’s share, but it is straightforward for them to understand the business of pharma companies. And there are also some such IT engineers.
Who instead of investing in any IT company, is left behind to invest in a pharma company. If he understands the business of that pharma company, then he should invest in them.
But if he does not understand his business, then he should not invest in those companies. Invest only in the trading company that you consider to be good.
Risk comes from not knowing what you’re doing.
– Warren Buffett
But if you invest in a bank, and you do not know about NPA, then you are making false investments.
3) Spending at the wrong time:
The third reason, investing at the wrong time. Often, when people have a discount or a sale in clothing, then they buy clothes. But when the stock market is a slowdown, i.e. a cell, then it starts selling good company shares due to fear of loss.
While they should buy shares at a recession, good company shares are also available at the best discount during the downturn in the market.
I will tell you how to be Rich. Close the door. Be fearful when others are greedy. Be greedy when others are fearful.
But people do precisely the opposite. When the market is running fast, many stocks grow by 5%, 10%, 15% on such a different percentage. By seeing such a fast in one day, more and more people invest in the stock market at the same time.
By which they get good profits in some time, but soon that profit turns into a loss. The Qaiki Way shares have been invested by buying at very high prices.
That’s why they do not have the money at the time of recession, and large companies get excellent discounts, then they can not buy the shares. So when the market is high-speed, everybody is buying, seeing this, not buying the shares.
Rather than analyzing different companies, buy shares only when they get good discounts.
Caution: You do not invest in any company even if you are selling a stock market. Instead, invest in a good company that you find only during the downturn in the market.
4) Spending in someone else’s advice:
The fourth reason for seven reasons ( 7 Reasons for loss in Share Market) in the stock market is that people invest in the help of one of their friends or their broker.
Investing in someone else’s advice is not wrong, but there is a risk in this thing. Maybe, on whose information you are investing, he does not know much about that company, and because of just a lot of speed, he is asking to buy the share of that company.
So do not invest directly on someone else’s advice next time. Instead, tell him about the company and then analyze himself. And if you look good, then spend only.
Doing so will save you from harming others. If the loss occurs, the adviser will never compensate you.
5) Investing in highly paid companies:
Investing in someone else’s advice is also afraid that we have not invested in a highly paid company. Such loans can spoil the financial position of any company.
Companies with much debt earn good profits as long as the business is doing well. But whenever a business slowdown, then the company’s profits go into paying off the loan interest, and that company is doing business only to repay the investment, it happens.
Until such companies reduce their debt in some way, they can not be profitable. Some people analyze the stock very well and find good companies. But they still do damage. The reason for this is that they do not have a Margin of Safety.
That is, if according to them a stock should be worth 100 rupees, then they buy the shares in only Rs 100 while they should buy shares at a price of fewer than 100 rupees a few percents. Such as 70 to 80 per wafer. The difference between these two is called a margin of protection.
Price is what you pay.Value is what you get.
– Warren Buffett
It is necessary that they may have made some mistakes in computing the price of shares. So if he buys the stock at a few percent lower price, then he will lose the possibility of the loss.
6) Not sure the amount of investment:
The 6th reason for the seven causes for failure in the stock market is that people do not make sure of the amount of their investment. This is also a big mistake.
Without the definite amount of Qiqi investment, they invest most of their money in the stock market. They do not have enough amount of money for an emergency.
And when they need money, then there is a slowdown in the market. They have to take money from the market by harming them.
Never test the depth of River with both the feet.
– Warren Buffett
So keep some of your money in fixed-interest investments.
7) Selling the share of the profits with the loss of the stock:
The last reason for the loss is the selling of the loss-bearing stock and selling the benefits. Often people do this, keep them in stock when there is a loss.
While the profits sell the shares, while they should not do this, it is not a good reason to lower the price to sell a stock.
Selling your winners and holding your losers is like cutting the Flowers and watering the Weeds.
– Peter Lynch
If there is a loss to you in stock, something went wrong with the company. You can also sell that loss.
But sometimes it happens that the company is making a lot of money and its business is getting better. But still, his share is not growing.
You should check more about such companies. Qiqi is probably not the only stock due to the downturn in the market.
So, due to these big seven reasons, ordinary investors have a loss in the stock market due to their friends. Hopefully, you ‘ve got a good understanding of ‘7 Reasons for failure in Share Market ‘.
If you need the information to earn money from the stock market, then read these posts,
Now it’s your turn, are you ready to invest by avoiding these reasons? By which you could earn an excellent return on your investment? It’s about me Comment assigning must do.
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