Stock market myths impeding young investors from building wealth


Uday Deb

Many myths plague the stock market, and for students who are investing for the first time, it can be an overwhelming experience. From investing being a rich person activity to the jargon around it, such investing myths have often driven young and first-time investors away from giving this money management activity a chance. These myths are often the reason behind bad decisions that may lead to loss, thus giving rise to a vicious cycle of monetary deficits and bad decisions. 

Here are some of the most common myths that student investors should be mindful of.  

You need a lot of money to start investing

This is a very visible myth among young, especially student investors who mostly, do not have a lot of money to invest. However, in today’s digital age, it is easy to connect with qualified brokers who can help investors start their investment journey from as low as Rs. 100 to Rs. 500. Every platform has a different minimum requirement, but it is safe to say that students do not need copious amounts of cash to start investing. 

The stock market is all about gambling

It is far from the truth. The Stock market is a place that offers high returns based on calculated risks. The reality of the stock market is that the cards lie with the investor, and he/she should make informed choices before investing in a stock. So why do people lose money in the market?

This is because of the lack of research done by first-time investors. They do not manage their money efficiently and fail to leverage the power of a diversified portfolio that reduces risk.  For students, who are just starting their journey into the stock market, it is important to connect with an informed individual or a professional to start on the right note. 

Investing is complicated

While the information on the internet is a good help to get started, it can also confuse young investors, leading them to believe that investing is complicated. While it is important to have some basic knowledge about the market and investment practice, starting out does not have to be complicated. In today’s time, investing tools like index funds, ETF, mutual funds, etc allow students and first-time investors to communicate with experienced professionals to make informed choices without diving into information dysphoria. 

Past performance of the stock guarantees future returns

A company’s past performance is no litmus test when it comes to predicting its performance in the future. This is because innovation and technology in almost every market are undergoing dynamic shifts which change how well the company will perform. 

They are likely to take a dip in case of a bad market and come back up just as quickly when things settle. Instead of solely relying on history, it is recommended that young investors observe and study the market, keep an eye out for new technologies, and follow merger/acquisition news to understand the potential of the stock to perform.

Final Takeaway

Student investors do not have to have it all figured out when they start their investment journey. Talking to experienced investors or professionals is important to understand the market without falling for the myths that circle the practice.

Talking to a professional investor can help solidify the foundation and allow student investors to invest wisely, based on proven practices and methods.



Views expressed above are the author’s own.



Views expressed above are the author’s own.