DISADVANTAGES OF SHARE MARTKET IN INDIA

Have you ever heard about the stock market? I heard you will know why most people investing in the stock market are at a disadvantage. But do you know that there are some people who earn a lot of money from the stock market? So would you like to know why this happens? So know here about the reasons that cause a loss in the stock market. Reasons and reasons for the loss in the stock market - 7 Big Reasons for loss in Share Market.

If you understand the share market well, then you will not get lost in it, but you can also earn good profits from the stock market, and if you invest in it without thinking, you may have to lose.

So you should know and understand the reasons for the loss in the stock market. Here we are giving you 8-10 big reasons for the loss in the stock market.


7 big reasons for the loss in the stock market.

If you will learn about these mistakes (or reasons) and avoid them, then you will also come across some people who really earn good money by investing in the stock market.

1) Investing without learning:

The first and biggest reason for the loss in the stock market is that people do not learn about the stock market before investing in the stock market.

People do not understand that for the job or business from which he is spending his life today, he has studied and worked for at least 12-15 years.

So can they not even take a few days to learn about investing to get a good return on that money? If he wants, he can teach a little bit every day.

But people don't do that and they invest something without knowing it properly, and then they lose. Therefore, you must avoid this mistake and take the time to learn.

Because it is better to pay lakhs of rupees in such a way, learning about investing by taking a few rupees and time. So that you can save those millions of rupees.

2) Investing in an incomprehensible business:

Another reason for the loss in the stock market is to invest in a company that does not understand business.

Many people make such a mistake that they themselves are a doctor, but they want to invest in the shares of a bank. Whereas they should invest in pharma companies whose business they have full knowledge and understanding.

It is not that a doctor cannot know how to analyze a bank's stock, but it is very easy for him to understand the business of pharma companies. And there are also some such IT Engineers.

Those who are behind investing in pharma company instead of investing in an IT company. If they understand the business of that pharma company, then they should invest in it.

But if he does not understand his business, then he should not invest in those companies. What I mean to say is that the business you understand well, invest in the company doing the business.

But if you invest in a bank, and you do not know about NPA, then you are investing wrongly.


3) Investing at the wrong time:

The third reason is to invest at the wrong time. Often people buy clothes when there is a discount or sale in clothes. But when there is a downturn in the stock market, that is, the sale is on, then they start selling the shares of good companies due to fear of loss.

Whereas they should buy shares during the recession. Because the stocks of the best companies are also available at very good discounts during the market downturn.

But people do exactly the opposite. When the market is moving fast, then many shares grow daily by 5%, 10%, 15% by such different percentage. Seeing such speed in a day, more and more people invest in the stock market at the same time.

With which they get good profit in some time, but soon that profit turns into a loss. Because they have bought the stock at a very expensive price and have invested.

This is the reason that they do not have money at the time of recession and big companies get very good discounts, then they are unable to buy shares. Therefore, when the market is very fast, then everyone is buying, seeing this, do not buy stocks.

Rather, analyze different companies from the best and buy the shares at the time of getting good discounts.


4) Investing in someone else's advice:

7 Reasons for loss in Share Market The fourth reason is that people invest in the advice of a friend or their broker.

It is not wrong to invest in someone else's advice, but there is a risk in this thing. Maybe, on whose advice you are investing, he himself does not know much about that company and is asking to buy the stock of that company only because it has grown very quickly.

So next time do not invest directly on someone else's advice. Rather, ask him to give information about that company and then do the analysis yourself. And invest only if you feel everything is right.

By doing this, you will save yourself from loss due to the euro's mistake. Because if there is a loss, the advisor will never compensate for your loss.


5) Investing in high debt companies:

There is also the fear of investing in someone else's advice that we have not invested in a loan company. Because high debt can spoil the financial position of any company.

High debt companies make good profits as long as the business is doing well. But whenever there is a downturn in business, then the profit of the company goes away only in paying the interest of the loan and it happens that the company is doing business only to pay the interest.

Such companies cannot come in profit unless they reduce their debt in some way. Some people analyze stocks very well and find good companies. But they still suffer. The reason for this is that he does not own the Margin of Safety.

That is, if according to them the price of a share should be Rs 100, then they buy the share for Rs 100 only. Whereas they should buy shares at a price of fewer than 100 rupees. Like 70-80 rupees. The difference between these two is called the margin of safety.

This is important because they may have made some mistake in calculating the share price. Therefore, if he buys shares at a lesser percentage, then the probability of loss will be reduced.


6) Not setting the investment amount:

The 7th reason for the loss in the stock market is the 6th reason that people do not decide the amount of their investment. This is also a big mistake.

Because the amount of investment is not fixed, they invest most of their money in the stock market. So that they do not have a sufficient amount for an emergency time also.

And when they need money, then there is a slowdown in the market. Due to which they have to withdraw money from the market by doing damage.


7) Selling a profitable stock by keeping a loss-share:

The last reason for the loss is to sell the profit share keeping the loss share. Often people do this when they keep a stock in a loss.

While profitable shares sell. While they should not do so. Because selling a stock just to reduce its value is not a reasonable reason.

If you are losing money in stock because something is wrong with the company. So you can also sell that loss share.

But sometimes it happens that the company is making very good money and its business is getting better. But still, its stock is not increasing.

Such companies should be investigated further. Because the stock may not be growing, perhaps just because of the market downturn.

So friends, because of these big 7 reasons, ordinary investors lose money in the stock market. I hope that I have been able to explain to you well about '7 Reasons for loss in Share Market'.

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