Misconception no. 1: 100% sure, you will lose your money in the stock market!
85% lose their money in the stock market. These people are called active traders. They are timing the market every day, every hour and even every minute. If you are not knowledgeable enough, you are 100% sure to lose your investment.
So who are winning in the stock market? It’s the long-term investors.
Investing in the stock market is a sure win if your goal is for the long run. Invest small amounts religiously on big companies every month. Let time and compound interest take care of it.
Misconception no. 2: Stock market is a scam!
Jollibee, Cebu Pacific or Banco De Oro, are these companies scams? Definitely not! We cannot blame Filipinos for being afraid of the word investment. Scams are almost everywhere. That was my initial reaction, too. So what did I do? I seriously get myself informed. Here’s the simplest definition I got.
Stock Market is a place where shares of publicly listed companies are bought and sold.
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When companies expand their operation, one way to get funds is to sell their shares to a corporation or individual investors like us. As we buy their shares, we become part-owners of this big companies. Isn’t it cool to say “I am a shareholder of Jollibee?” or “I am one of the owners of Cebu Pacific Air”.
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Misconception no. 3: Stock market is so volatile! It’s the riskiest way to invest.
In any kind of investment, the risk lies in not knowing what you are doing.
Yes, the stock market is volatile. So if you buy today and sell tomorrow, you have the highest chance of losing your money if your timing is odd. That only means you need to know more. The secret is to educate yourself in any investment you are getting into.
In the same way, you are keeping your kids’ education fund in the bank. By the time they reach college, you can only afford 1 year of his college education. Keeping your huge amount of money in the bank for a long time will lose the actual value from inflation. That my friend is a big risk!
Buying a condominium unit or an apartment as an investment will possibly bring you to a higher risk. These assets will only become an investment if it puts money in your pocket otherwise, it’s a dead investment.
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Misconception no. 4:The stock market is only for the rich.
Have you heard of Bo Sanchez’s maid who invested in the stock market? Yes, and he even writes a book on how he did it. “MY MAID INVESTS IN THE STOCK MARKET” is not merely about investing, it was an inspiration.
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Personally, this book transformed my family’s financial status from negative to a positive net worth. We have simultaneously paid out 10-year credit card debts amounting to more than half-a-million pesos and build our stock market investment in just 15 months. This is our Financial Story:
Read More!
So, how much do you need to start? It is just a meager 5,000 pesos. Succeeding investments can be as low as 1,000 pesos. Yes, you read it right. Bo Sanchez maid is now a millionaire in less than 10 years of discipline. As a maid, she just started at 2,000 pesos a month. So if you think you have more than 2,000 pesos to keep, then you can also do it! Neither Bo’s maid or people once buried in debt like us are rich. Certainly, the stock market is not only for the rich!
Stock market investing is gaining popularity nowadays. Because of this, people wanting financial freedom are now seeking help from forums and blogs dedicated to personal finance. Most of them are looking for ways to manage their incomes and secure a brighter future.
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It’s undeniable that some are still afraid to invest in the stock market. Here are the 4 most common misconceptions about the stock market that keep people from investing.
