The stock market is full of misinformation and fallacies, so make sure you’re on the lookout for these 5 stock market myths:
1. You have to have a Finance Degree to Invest in the Stock Market- This is one of the silliest myths we’ll encounter, as anyone with money can open a stock brokerage account. Now whether or not you’ll be successful is a different story, but there are plenty of day and swing traders who make money with no credentials whatsoever.
2. You can’t have any debt if you’re going to put money in the Stock Market- This myth is quite silly as well, as many traders make money using borrowed money. We’re not recommending trading with leverage, but it’s an effective strategy for many. Nonetheless, make sure you’re in a healthy financial place before putting money into the stock market.
3. You have to be Rich to get started in the Stock Market- This myth is also baffling, as most of America’s millionaires made their money by investing in the stock market and slowly growing their portfolios over time. With stock brokers slashing their commissions to zero, it’s become easier than ever for the small investor to make big profits in today’s stock market.
4. Putting your money in the stock market is gambling, so just kiss your money goodbye- This myth is likely passed on by those who have blown up their trading accounts. Without knowing why they lost their money, they naturally turn to blaming the market and claiming that it’s rigged or just a flat out gamble. While we sympathize with their pain, the stock market is far from a gamble for those who have an effective strategy and risk management, which are two of the fundamental components of successful trading.
5. Stocks that go up will eventually come down- While stocks often move in a wave-like pattern and experience bullish and bearish cycles, not all stocks see this sort of correction, which is why it’s important to trail your winning trades and only cut them when they break their pattern. This is what the best traders do, so be sure to learn from and mimic the best.