Losing Money in the Stock Market

The stock market is an excellent place to build your money over time. The returns on these investments are far higher than other investment types. You can save wisely for your retirement and build your wealth.

Most advisors say that it is a necessity to invest in the stock market.

However, it is often said that 95% of the public who play the stock market will lose money.

Seems kind of contradictory. What is happening here? Either the stock market is a good idea or it isn’t. Is the average person unable to invest or is he doing something wrong.

A lot of people who lose money on the stock market give the reason as being that they were given poor advice or that they used the wrong method. Sometimes they say that it is impossible to compete against the professionals. A lot of time, there is blame against others. The real reason is often hard to get to under the anger and emotion involved.

Making money in the stock market is not difficult. We make it difficult by becoming overly involved. Look at the dot-com bubble in the 90’s. What goes up must come down, yet many investors got caught up in the excitement of making money and forgot this basic economic rule. When the market came crashing down, many investors lost out. And they failed to see that they helped bring the market down.

Then, the market started to rise again — just like it always will. That is what makes the stock market a good place to build wealth. What goes up, goes down and back up. Things rebound over time. You simply have to hold your emotions, and greed, in check and follow some tried and true rules.

For example, most of the winners stay on the sidelines most of the time. They are waiting and researching. They don’t constantly invest. If you trade every day, you will probably end up losing out. You have to be disciplined in your investing. There is no such thing as settling. You have to wait for the perfect situation.

The losers often let greed get in the way. They follow every piece of advice that promises gains of 500% in the next week. They trade without considering the overall business view. They get excited about gains and upset about loses. They “stick things out” hoping for a rebound in a stock.

When it comes to stock investing, your investments should be made for the long term. This doesn’t mean that you pick a stock and let it ride for 20 years. There is more work necessary than that. But what it does mean is that there are losses and gains. The hope is in that the gains will be more than the losses.

Successful trading is both easy and hard. The easy part is that prices, trends and volume are strategies that don’t change over time. There are tried and true win methods. However, you have to learn to control yourself when it comes to investing. You must have patience and discipline. And never forget the risk.

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