Tags: Common | stock | market myths | myths about stock market | stock market myths and beliefs | myths about trade the stock market | myths about foreign stock markets.

5 Myths About the Stock Market

Monday, 06 Dec 2010 10:22 AM

It is important to understand the stock market if you are an investor.
 At times, it can be difficult to differentiate between myths about the stock market and the facts.
Here are the top five myths about the stock market:

facts myths stock market
1. October is considered one of the worst months for the stock market. While there may have been some bad Octobers, there have been many occasions when the stock market has done well too. Another month-related common stock market myth talks about May being the month when stocks should be sold. An age-old saying goes like this: “Sell in May, Go Away.” However, many times, the stock market has improved in May and in subsequent months.
2. Another common stock market myth says that you must invest based on expert advice. Although experts can certainly understand the markets better, it is not always wise to follow the advice on an expert.
3. Another common stock market myth relates to long-term investment. The myth says that this is the only way to earn good returns. It is indeed a good strategy to retain investments for a long time, but good returns can be had in a short term too.
4. Another common stock market myth advises people to buy stocks when they are falling and to sell them on uptrend. A falling stock often lures investors to buy at cheap valuations. However, it is not true that the stocks that are falling would not stop declining after you have bought them. They may keep on falling if the fundamentals are not strong or if the market is on a downtrend. Similarly, a stock may keep rising even after you have sold, if the fundamentals are conducive.
5.  One common stock market myth says that you need to invest a large amount of money to earn good returns. It is simple mathematics that a good return can be earned on a good capital only. The reverse is also equally true and losses would also be higher in such cases. It is the quality and not quantity of the investment that decides the returns.

© Newsmax. All rights reserved.

PLEASE NOTE: All information presented on Newsmax.com is for informational purposes only. It is not specific medical advice for any individual. All answers to reader questions are provided for informational purposes only. All information presented on our websites should not be construed as medical consultation or instruction. You should take no action solely on the basis of this publication’s contents. Readers are advised to consult a health professional about any issue regarding their health and well-being. While the information found on our websites is believed to be sensible and accurate based on the author’s best judgment, readers who fail to seek counsel from appropriate health professionals assume risk of any potential ill effects. The opinions expressed in Newsmaxhealth.com and Newsmax.com do not necessarily reflect those of Newsmax Media. Please note that this advice is generic and not specific to any individual. You should consult with your doctor before undertaking any medical or nutritional course of action.

Keeping you up to speed on Lifestyle, health, and money-saving tips
Get me on Fast Features
Keeping you up to speed on Lifestyle, health, and money-saving tips
Zip Code:
Privacy: We never share your email.
Follow Newsmax
Top Stories

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved