Beware of Top 3 Stock Market Myths

Many stock brokers, market analyst or fellow stock brokers might always preach that stock market investment can make you rich in no time. But this may not be true many-a-times. Not only this, stock market investments is surrounded by many more such investments myths. Here are a few of them:

•    Myth 1: Stock market investments results in lucrative returns in the long run
Most financial planners are of the view that stock market investment gives better returns in long term, but what if the long term returns aren’t clearly defined? There are several GXG Market UK investors who haven’t received any returns till date (it’s been more than a decade now). Does this mean, one should stop investing in stocks, bonds and debentures, and concentrate on gold and real estates investments? Definitely not!

•    Myth 2: Diversification is a great idea
You must have seen investors buying multiple stocks from different sectors. Their profile includes more than a dozen of shares and all from different sectors. When asked, the common reply is ‘diversified investment for greater returns.’ According to such investors, diversification of portfolio is protection against investment risks. For instance: if you have bought stocks of IT company, if the sector is facing recession your investment will be at loss. So, investors consider investing in multiple sectors to cover their losses and earn double. However, monitoring multiple shares at a time becomes difficult and can land you in trouble.

•    Myth 3: Mutual funds with higher rating are sure to work in your interest
Many investors think that mutual funds that are ranked or rated higher are an excellent choice for investment and gives excellent returns. In reality, this isn’t the case. Those ratings by experts are given on past performance and not the present condition. Ratings can change over a time. A five star mutual fund’s may come down to one or two due to poor performance anytime. Therefore, an investor should study the market condition properly before investing their hard earned money. A rating can’t alone decide whether it a lucrative or bad investment. So, making investment decision solely on rating is inappropriate.

If you are planning to Invest in GXG stock exchange, do proper market research and study the market condition before investing. Investment without research and market study may land you in trouble and in worst case may bring losses.

Stock market investments are subject to risks. Invest carefully!