Stock Market is a rollercoaster journey. When you are at the first stage, you will be given a lot of advice from several sources. Dotbig Blog will make you take certain steps which might not prove to be very useful.
When you start in the stock market, you will be doled out with a lot of confusing advice. Someday you will read that warren buffet said that we are in a bull run, and then you will imagine that we are in a bull run. You will start investing money; then peter lynch will say the next day that no, we are not in a bull run. The debt market is going to go up. The stock market is going to tank similarly. There are contrary positions that even ace investors like warren buffet and peter lynch all take a right, so if you hear their opinions, you will get confused. Don't get me wrong, it's great to learn from them, but sometimes as a beginner in the stock market, we end up absorbing so many different things that it confuses us. We end up making a massive number of mistakes, so on this blog, I will cover five specific mistakes that beginners in the stock market usually make. Even if you are an intermediate-level player in the stock market, do read this blog. It's going to be very important.
making investments based on news
The first key mistake that you are going to make in the stock market is that you are going to make investments based on the news, so please do not do this; please understand that many times the news is manipulated, please understand that many times the media outlets are owned by major conglomerates; therefore, many times, you will see that if something is going wrong with a major business house in, it will not get covered in any of the media houses or if a major business wants to give out certain kind of news then they can easily push it because they themselves own the media, so these type of things happen all the time. Sometimes financial writers write things in a very incorrect way. By reading these headlines, you will start panicking that you know what somethings happening. I should get out of this stock, that's precise. That's happened that many people sold their stock after the news, but this is how reporting is done.
It really can confuse you, and it can make your life difficult. Hence, always double-check multiple sources for news understand and interpret the news correctly don't just go by headlines and don't trade on stocks either buy or sell on stocks just given the news right that's one of the key mistakes that you will make that's one of the key mistakes even I made when I started my stock market journey so, please understand it so what are some good sources to consume.
Not investing in value stocks.
The second key mistake you will make in the stock market is that you will not invest in value stocks. Now value investing is a simple philosophy I will explain it in a very easy to understand way now essentially whenever you are buying any business it can be a large cap business it can be a mid cap business it can be a penny stock it can be a small cap whatever right whenever you are buying any stock be it ITC, HUL Tata Motors whatever business you're buying what are you doing is you're buying a business right it can be large cap small cap whatever cap it doesn't matter right you are investing your money in a business value investing simply says that you should buy a business that has high prospects of growth in the future that is the same philosophy that every as investor uses in very simple terms whenever they are making an investment in any business be it a startup be it a listed company be it an unlisted company they are going to understand the growth potential of this particular company its important point for you to understand is that whenever you are going and investing your money in any stock please understand that you are investing in a business that is likely to grow right so understand future prospects of it future simply means there is certain horizon that you are okay holding that stock for it could be one year it could be six months it could be five years so define that horizon understand whether this business will grow in that horizon or not and then make a call right many a times what we do is that we just say and we expect people to tell us multibaggers there is no such thing as multibaggers there are good businesses that are likely to grow in the market and then there are bad businesses that will not grow.
Not understanding the assets you are buying.
The third mistake you will make in the stock market is that you will not understand the assets you're buying now I am a big believer in cryptocurrencies. I openly advocate that if you're young, if you're aggressively investing your portfolio, then you should have a little bit of exposure to cryptocurrency; now, when I go and speak with people that hey what do you know about bitcoin where is it deriving value, what do you know about ethereum, what do you know about NFT they will not understand anything they will say that you know because Elon Musk tweeted something. Therefore, we bought it; now he's probably getting out of cryptocurrencies. Therefore, we are selling it if you don't understand this basic stuff then it's a problem. When you're getting into assets, you should have a minimum understanding of it.