Some truths about stock markets

Hi there,

From this post onwards, I am going to kick off the discussion on shares as an option to create wealth. Let me start by saying 7 straight truths about stock markets.

First, nobody gets rich quickly in stock markets. Some of your friends might have blindly invested in some stocks which, to their luck, gave them exceptional profits. Yet, they never became rich. Did they? So that’s the first truth about stock markets – it’s not a place where you  get rich quickly.It takes time to grow your money.

Second, it isn’t easy for beginners to make money on the stock exchange. If it was such a simple exercise, Mr. Warren buffet wouldn’t have become so famous. It takes genuine effort to spot profitable investments.

Third, your broker, friends, neighbor, colleagues et al would come up with ‘sure shots’ everyday; there are too many stock analysts out there giving out fee based stock recommendations. It’s easy to get tempted by all these people around you. After many years in the market, my thoughts keep wavering when somebody comes up with such ‘sure shots’. Should I explain the fate of a beginner? It’s important to stay off from these temptations. It implies that you ought to have ‘independent thought’. Independent thought is something very hard to carry through.

Fourth, most of the investors are a bit too casual with stock markets. They ‘play’ in stock markets.  Stock exchange is a wrong place to have fun, speculate and try luck. The Stock market is actually a place dominated by big investment houses and financial experts. This is a place where the world’s brightest finance professionals put their best efforts to make right investment decisions. Nobody is playing around. So, to be successful, you too, need to be serious. You have to view it as a business. When you buy shares, you are buying a company to that extent. Buying a company is no Fun!

Fifth, realise the fact that broker’s income is the commissions you give. The more you trade, the more they get. When I was serving as the manager of a broker, I used to get monthly targets for the volume of brokerage that should be generated. If I don’t do that, my salary payment gets delayed. Each branch was viewed as a profit center. Myself and my colleagues used to hit our targets but our investors rarely did! Most of the brokerage houses encourage their clients to do as many trades as possible whether it’s good for them or not, and keep doing it until you have used up all their money. If you get too many frequent ‘Sure shot market tips’ thru sms, mails and phone calls – think twice. Your broker may be interested only in generating commissions. Make sure you don’t get into such traps. Do have faith in your broker, but don’t blindly follow them. They can give you advice but they can’t guarantee that you will make a return on any investment in the stock market.

Sixth, as you begin to study the principles, you’ll hear about derivative instruments like futures and options. Instruments like  options and futures are NOT for  beginners with limited resources. They are highly technical, involve the potential to lose all of your investment quickly and need constant monitoring. Playing Futures and options without adequate working knowledge is like gambling at Las Vegas.

Finally, you have to keep on working on your stock picking skills.  Keep following the market developments. You’ll also need to study some basics on economics, accountancy, income tax and mathematics.

So, # No quick riches in stock markets # it’s not the place to have  fun with money # you shouldn’t be blindly believing your broker’s recommendations # never try your luck # and,  learning is the only way -to make  right choices in stock markets.

So, let’s begin from the roots. My next post would explain what shares are.

Before you take the plunge, think about what’s said above.  To succeed in stocks, you’ll have to put maximum efforts to learn the game and be serious with investments.

May God help you to achieve your goals.

Bye!!

No related posts.

46 Responses to “Some truths about stock markets”

Ryne

September 21, 2011 at 4:44 pm

I raelly wish there were more articles like this on the web.

pramod

December 20, 2011 at 7:21 pm

Excellent explanation for beginners from non commerce sector..

I like it.
(I am engineer)

Dipesh

February 18, 2012 at 2:59 pm

Thanx…..

Satish Sasi

April 27, 2012 at 1:20 pm

very good explaination.. thanks……

Akshay

May 26, 2012 at 3:45 pm

Very helpful

Elango

July 9, 2012 at 7:32 am

Thank you..!!!

Satheesh

July 11, 2012 at 5:22 pm

Lucid & Simple .. thanks for sharing !

J Victor

July 12, 2012 at 1:52 am

thankyou!!

Giri

September 8, 2012 at 11:53 pm

Buddy, in general, all articles by u r informative, keep upadting,

J Victor

September 9, 2012 at 11:12 am

Thankyou Giri:)

Hardik

September 10, 2012 at 4:04 am

It’S very Easy To understand Its Helpful To all Thanks .

J Victor

September 10, 2012 at 7:31 am

Thanks hardik:)

VIKAS G

September 16, 2012 at 6:36 pm

NICE INFORMATION VICTOR

Angel

October 18, 2012 at 7:45 pm

Congrats J Victor on putting up your valuable site. Please persevere with this effort. It is immensely beneficial to a lot of newbie investors.

Thanks once again and may God bless you.

Srinivas

December 19, 2012 at 9:24 pm

Thank you very much for providing the such Great and very useful info for beginners…

krishna

December 29, 2012 at 9:43 pm

boss,

really good guide for the new investor……….

Dinesh Hockey

January 21, 2013 at 10:47 pm

Very Useful for the beginners like me………Thank you,

ajay

January 31, 2013 at 12:09 am

Excellent boss.. M so happy because some times i was in gain and some-times loss due blindly followed the broker’s advice. Any how, M planning to research the stocks in own-way. Can you helpus, how can we do that?

TL

March 1, 2013 at 1:28 pm

It was so pleasure reading such valuable content. Mpressed!!!

Wish if you could launch some android app for the same :-)

mohit

August 29, 2013 at 6:24 pm

faad

Karthik

September 24, 2013 at 3:29 pm

I have studied some of the articles in your site, Its really nice to recall the memories of what i did in share market. Mostly you are trying to safe the people to avoid losing money on market. I am learned more thing from this. Thanks..

Hereon like to know how to make money from share market.. There are multiple hurdles (Hard, complicated, not suitable for most of the peoples, learning stock market, not simple). But we are here with hope. Like to have more views on getting self growth in stock market. How to find the mood of market? and more information on Nifty future/options.

Basheer

January 1, 2014 at 1:46 pm

Very good one… most of my doubts cleared…. excellent keep up good work ….

Sivan

January 25, 2014 at 3:45 pm

Finally I have discovered the Bible of stock market basics. thnx Jins.

Agalya

February 17, 2014 at 3:02 pm

All the articles are very clear much understandable in a easiest manner… Expecting more informative articles from your end Jins…

ravi dubey

February 21, 2014 at 10:41 pm

there is some articles which is useful to all of my dear friends so i thank for it

SANDDEP KHANVILAKR

February 22, 2014 at 12:04 am

very helpful

Kamalesh

March 4, 2014 at 9:35 pm

excellent

Paul

May 29, 2014 at 2:36 pm

Eye opener for beginners. Superb. Continue to give your valuable advises.

Sandesh Nandode

July 22, 2014 at 6:38 pm

About shares & stock markets as a whole…the contents are superb well explained in simplified language, i found it very very useful. Excellent work done.

Jayshree shah

July 23, 2014 at 11:40 am

Good advice, Thanks

Aman Pushpak

September 14, 2014 at 10:31 am

thannxx!!

pradnya bafna

February 14, 2015 at 6:32 pm

too good.

Sheetal

February 21, 2015 at 5:13 pm

sir,
Excellent good learnings for beginers

naren

February 22, 2015 at 12:03 am

Hi author,

thanks for excellent thoughts.

all those are mostly realistic and what we face in our time in trading…….

hope a needy beginner will have clarity what he has to do n what not……

Suraj Kadlag

July 3, 2015 at 8:19 pm

Thank you very much….its good for us…thanks again

Vijay

July 20, 2015 at 3:32 am

I am wondering why are you providing all this information free of cost. I am going to start investing in shares and was looking for some place to know the fundamentals of investing as it is going to be my full time business. I have read from many sites but for me your site seems to be the most helpful.

dinesh mistry

August 2, 2015 at 3:06 am

Fantastic summary captured so succinctly :)

Tarun

August 30, 2015 at 11:55 pm

This is what i was looking for. You have explained it so well, easy to follow and understand.

Thank you for you efforts in making our life in understanding the financial world. :-)

Richa

October 17, 2015 at 12:00 pm

Thanks a lot! :) keep posting

Nagaraj

March 25, 2016 at 11:39 am

It’s very use full information for those who begins now,,,, shd adopt it ll succeed successfully

Joseph Stalin

April 2, 2016 at 8:36 pm

Good Advice rather than information-Thanking You a lot

vignesh

April 21, 2016 at 4:01 pm

Fantabulous work, you are user friendly and beneficial.
Not laborious, hitting the Bulls eye with simple points.

Keep going, we are there to support!!!

J Victor

April 25, 2016 at 8:18 am

Thanks Vignesh :) expect more in the coming months …

s rameshmanju

July 10, 2016 at 7:52 pm

Thank u

Manoj

October 1, 2016 at 5:27 pm

Thank you
Very good article I ever read.
Explained and advised very simple way

Nagendra K

October 10, 2016 at 12:00 am

Thank you very much Mr.Victor
Good explanation for beginners.

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