subject: More On Stock Market Misconceptions [print this page] People who are just starting their retirement portfolios are not the only ones who often fall prey to surefire strategies to make big money from stock; even relatively knowledgeable stock holders swear by many of these stock market misconceptions. When it comes to market trends, which many of these strategies are based on, the only thing you can expect is the unexpected.
Financial firms often spend a huge part of their company money on hiring graduates from the best universities; investments that can cost them upwards of billions of dollars, supposedly to fund training and develop software that automates making investment decisions and managing fortunes. The downside is, studies show that many of these professional financial advisors tell investors to buy when they should sell, and sell when they should buy. The collective move is based on plain old human nature and the concept of the bandwagon, that is when someone gets a boatload of profits on buying or selling stock, everybody wants in on the action. It is almost the same for those who want out when the going turns rotten.
The problem with this situation is that when many people sell, there are not that many who buy, causing a sizeable drop in stock value and market performance. What this means is buying in a low-performing market caused by a spike in sales would be much like the boy trying to stop trickles in a dam that is about to burst.
Many experts have also advised, fairly recently, that investors need to buy into relatively unpopular stock market sectors and industries to make good money. These sectors include the housing industry, wherein you will have to buy from stronger companies or invest in promising ETFs and mutual funds. AS for the growth potential of stocks in the healthcare sector, well, buying into these probably w ill not give you as much of a profit as professionals say. These may have been hot not so long ago, but not now.
If you are only starting to invest for retirement, or have only started closely scrutinizing the assets in your retirement portfolio now, there are a lot of things you need to know and consider about the stocks you have, as well as other assets in your folio. While stocks are an important part of any set of investments as these help the overall profit-growth aspect of your portfolio, you will need to regularly manage your risk levels and update yourself on stock investing strategies and tips that could be invaluable, or turn out to be stock market misconceptions.
