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Five Stock Market Myths

Five Stock Market Myths

One of the reasons so many people are victimized by unethical stockbrokers and other actors is that many people lack an understanding of the stock market and believe in some dangerous, damaging myths.

Our stock market lawyers want to help you gain a clearer understanding of the often confusing financial markets. Here are five notable myths about the stock market:

  • Stock market investing is easy: This, of course, is one of the biggest misconceptions that many investors believe in. The reality is that successfully investing in the stock market is difficult. It requires extraordinary knowledge and full-time devotion to the project.
  • Always buy stocks at their lowest: The essence of investment is, of course, “buy low, sell high.” However, too many people assume this means that any stock trading at or near a 52-week low is a good investment opportunity. In reality, a stock might well be fundamentally flawed. Just because a stock is cheap, doesn’t mean it’s a good investment.
  • Stock market investment is just like gambling: Unlike gambling, investing in the stock market brings you real, actual value- a percentage of the company. Furthermore, the fundamentals of investing in the stock market are sound and favorable in a way that casino gambling isn’t.
  • The stock market is only for rich people: It often serves the interests of stockbrokers and professional investors to claim that only rich, powerful, connected individuals can successfully invest in the stock market. Again, investing isn’t easy, but it’s possible for an intelligent, careful, well-informed individual to make money in the market.
  • You should always follow the advice of famous investors: Many researchers have studied the recommendations of prominent, professional investors and found that they do not meaningfully over-perform the market as a whole. It’s important to read as much as you can, but don’t assume that what you hear from prominent TV personalities is automatically sound.

Remember: there are no guarantees in stock market investing, no simple rules you can follow for an automatic gain. If you decide to invest, do so carefully, after a full consideration of your financial situation and the fundamentals of the market.

If you need an experienced stock market lawyer to help you pursue compensation for losses you’ve suffered as a result of unethical brokers, please call Colling Gilbert Wright today at 1-407-712-7300