WHY DO MANY BEGINNER INVESTORS LOSE AT THE BEGINNING? THIS IS A REASON THAT IS RARELY DISCUSSED.
Losses are common for new investors. Learn the psychological traps and basic mistakes that often lead to repeated stock market losses.
Losses are a constant companion in any investment, and I consider them perfectly normal. Some financial experts even consider them a learning curve.
Losses when starting out in stocks generally stem from basic mistakes when starting out.
They still have difficulty distinguishing between trading and stock investing. I've explained this in my article on the frequently misunderstood differences between trading and stock investment.
Expectations that are too high from the start
Many novice investors enter the stock market with the idea of making substantial profits in a short time.
However, when their expectations don't match reality, they become disappointed, leading to impulsive decisions. These initial high expectations often lead to losses.
Relying too much on fleeting information
Recommendations from social media, discussion groups, or close friends are often used as the basis for making investment decisions.
Information from these sources isn't always wrong, but there are risks if we blindly believe it.
So, filter and select the information, and, if necessary, analyze it further to determine its accuracy.
Not having a clear roadmap
Without an investment roadmap, novice investors will be lost. They don't know when to buy, hold, or sell their shares.
Ultimately, their decisions are made situationally, driven by emotions and short-term market conditions.
Psychological factors that are rarely recognized:
Fear of loss and the desire to recoup capital as quickly as possible often lead to greater losses for investors.
These psychological factors significantly impact the investment returns we could have achieved.
Remember, investing in stocks takes time because the results aren't immediately visible. The key point here is that patience is always the difference between a true investor and a non-true investor.
This is part of emotional management, as I have also explained clearly in another article, why emotional management is more important than stock analysis.
The key is to understand the basics thoroughly before buying stocks for the first time, so you can avoid losses early on.
Losses can't always be avoided, but they can be managed with the right stock investment strategy as i have explained in the previuos article
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ECONOMIC AND BUSINESS