Fear Of Losing Money In The Stock Market

A recent survey revealed that 53% of investors fear the stock market because they think they will lose their savings by investing in stocks

. But to what extent is this true? Is investing in stock market really so dangerous? Find out in this article.

Ups and Downs

One of the biggest causes of concern for investors is the intense ups and downs of asset prices in the stock market. In one day everything is green and the investor is happy, celebrates and tells his friends. In another, it's all red and he panics, start biting his fingernails and think about quitting. If the prices stay still, he thinks, then it would be much easier to invest!

The problem is that the fear of the natural movements of markets means that investors will try to find order in places where none exist. The stock never cease to move, there will be good days (green days, gains) and bad days (red days, losses). The rational and well trained investor knows that this is totally expected and natural.

It is simple to understand because one is desperate and the other remains calm as markets get stormy. Investors that worry probably do not know what they're doing, do not know how to really invest in the stock market and worse, do not trust their own abilities. Why? Because they have none!

On the other hand, the good investor is not concerned with the "scary" ups and downs of stocks, they know what they're doing. He believes that investing in shares of solid companies with good fundamentals is a great idea, that's why he doesn't fear the future because he knows that in the long run, his investment is worth it.

Fear of Losing Money

These normal movements of the market scare the untrained investor and make him try to avoid them. Then he begins to speculate, badly. Instead of keeping his shares adding dividends, interest on capital and following the natural tendencies of business, he decides to buy and sell the same stock multiple times in a week. Sometimes even the same day!

But bear with me, if someone did not know how to invest in the stock market before, how is he supossed to know how to speculate? Nahh, he doesn't know how to do that either!

This is unfortunate but this ignorance will only accelerate his downfall. He does not know how to invest, he can't speculate, he is not able to understand that the more times you get in and out of an stock, the higher the brokerage fees will be. So of course, the ignorant investor will lose all of his money. All because he was not prepared. So never forget it: the market does not forgive those who do not know what they are doing!

In the end, all this fear and self-destructive process that can be stopped when the investor decides to study the stock market seriously. If you dedicate at least a few minutes of your day to learn how to invest in stocks the right way, you will be able to invest properly. You'll learn that the movements of the stock market are normal and that even during bad periods, your mind will be calm because you are investing for the long term and don't have to worry about the day-to-day noises.

by: Peter Corrs

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