On Friday, I sold a hard copy of my book, The Stock Market is For Everyone. My interactions with the buyer inspired me to write this post.
I asked him if he knew anything about investing in the stock market. His answer was “No. But I always wanted to learn.”
He also believed that investing in the stock market was for the rich only. And that’s the part of his answer that inspired me to write this post.
Without further ado, here are:
5 Myths That Prevent People From Investing In the Stock Market
1. The stock market is for the rich!
No, my friend. The stock market is for everyone!
I will admit that in the 70s, 80s, and part of the 90s, the stock market was really only for people that had the means. There were no discount brokers at that time, and a traditional broker wouldn’t even look your way if you didn’t have a few hundred thousand to invest.
Those days are long gone, however. Today you can buy one share of a $2.00 stock if you want!
2. The stock market is like a casino!
The stock market is like a casino if you buy stocks that trade in pennies with the hope that one of them goes up in value. Aside from that, though, for the most part that analogy couldn’t be any further from the truth!
When you buy shares in a reputable business that is growing and will continue to grow, that is not gambling!
That’s the very essence of investing: buying an asset that will appreciate in value over time.
It’s no different than buying a piece of real estate – which most of us are familiar with – and is in most cases far more profitable.
3. You can’t make money in the stock market!
Now you might not believe this, but we individual investors in fact have more power at our disposal than institutions do.
Here’s why. When an institution buys a stock, they are under pressure from their investors to show returns every quarter. So they trade much more frequently. The fees for these trades then lower returns for many of their shareholders.
As an individual investor, I am not beholden to anyone but myself. I can hold on to a stock for 30 years if I want to. And buying and holding for years is how real wealth is generated.
4. The stock market is rigged.
Let me give you a list of some of the best currently or formerly publicly traded companies in the world as proof that this statement is utter nonsense:
2. Home Depot
4. United Health Carr
7. Monster Beverage
Investing $5000 in any of these great businesses at their initial public offering (IPO) would have made you a multimillionaire!
Does that sound like a rigged system to you??
5. I don’t know anything about investing!
You don’t have to be an expert to invest in the stock market. Just do a little research and use common sense!
For instance, if you’ve ever shopped at Costco on a Saturday, you can tell by the parking lot that it would probably make a good investment.
Sometimes it’s that simple.
Click the image of the book at left to be taken to its Amazon page. (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)