Can you tell me anything to change my mind about quitting the stock market for good?

I want to quit the stock market because I had enough losses, I have eroded most of the capital which  I invested in the stock market.

My friend asked me this question after a few trading sessions in the stock market. he said Warren Buffet told us not to lose money, but in my case, I have already lost 80% of the money from which I started. When I closely observed, I found many retailers are actually losing money in the stock market. 

rules of Warren Buffet

Mistakes done in the Stock Markets by Retail Investors

 The stock market is the legal way of transferring money from the pockets of 97% to the 3% of participants. Why do retail investors keep losing money in the stock market? It is because they are doing certain common mistakes like:-

  1. Buying and Selling on tips and tricks-There are So many investors who take decision off investing on the basis of what their friends a social circle have told them.  sometimes the retailers Run after the hot stocks that are being discussed in the news. If I give your recent example,  so many investors want to buy stocks of Zomato Limited just because it is the talk of the town. Analyzing the stock on the basis of its business model, fundamental analysis and technical analysis is very important before we invest in a stock. There is always a business behind a stock, if we have a conviction about that business,  if it’s if we can see its growth in the future,  if it is Profit making,  only then we can buy that stock ok and hold it even if it is down by 20, 30 Or even 50 %.
  2. Working intraday- Most of retailers think that the stock market is an easy way of making quick money.  predicting the movement of stock could make huge money. but that is not true . 100% of your predictions in a day may not go right,  but 100% of your intra-day trades had definitely made commissions for your broker. 
  3. Using stop loss- If I am sure about a business that it is a good business model and the company has a good fundamental structure,  then why should I use a stop loss? Just think for a second,  does a change in the price of the stock of Colgate will bring any change in its business?  will it start manufacturing less toothpaste when the stock price is less or, will the customer will stop buying if the stock is coming down?
  4. Not analyzing the company’s performance after investing- We need to Have an eye on the quarterly result and annual results of the companies we are invested in. Certain companies who have gone bankrupt,  have first shown wrong signs on their balance sheet.
  5. Not learning before investing-  we have learned everything we are doing from walking,  talking, being trainees in a company before getting a job, etc., we have learned everything,  how could we jump into the stock market without learning?  we need to learn certain basic things before trading in the stock market like,  how to choose the company,  how to see its balance sheet,  how to analyze its business model,  what is the right time to invest in the stock, etc.
  6.  buying a stock when it is lifetime high and selling it when it is trading low-  you must be thinking it is a foolish statement, but yes it is true. most retailers enter the market when it is in Bull Run and want to exit in the bear phase. Everybody knows the reverse should happen, but when it’s the actual time, we get greedy when stock is at a lifetime high, and fearful when it is 52 weeks low.
warren buffet quote

The number of investors in the stock market has increased from 19 million in FY11 to  40.8 million in FY 20. CDSL As reported 89.7 million active Demat accounts in India in year 2021-22. This was possible because of factors such as increased use of Smartphones , easier digital experience for the customers, and lucrative returns by the equity markets. The pandemic made us rethink are spending and investment habits. eKYC and eAdhaar made Opening Demat accounts from the comfort of your home. The rise of discount brokers like  Zerodha and Upstocks made it very easy to invest in financial markets. Tier 2 and tier 3  cities also participated In the stock market rally because of low-cost data.

Number odf Demat accounts active from FY11-20 stock market

Entering the stock market is not an option but a necessity in today’s time. the money we are saving in our lockers or under the mattress keeps depreciating because of inflation.  investing in FDs and PPFs Is not enough to protect our Capital from claws of inflation. 

Simplest Strategy to earn Wealth in the Stock Market

I would like ok to request all the readers to keep investing in the market and making profits by following a few simple principles:-

  1. Trade only in blue chip companies which has good financial potential to grow.
  2.  invest only 5% of your portfolio in a stock 
  3. Buy the stock when it is at ITS 52-week low
  4.  sell the stock when it Is up by 20 to 30%. then wait for another opportunity
  5.  never put stop loss. 
  6. Trade only in stocks,  no intraday,  no F and O.

 if you could follow this simple strategy, No one can stop you from making decent gains in the stock market and making wealth out of your savings.

Use the link to open a Demat account in Zerodha

Also read

  1. Want to invest in Stock Market, but don’t have time and skills, try SWING TRADING
  2. Can you tell me anything to change my mind about quitting the stock market for good?
  3. How to select stocks for investing in 2022. How to select great companies for investing for beginners.
  4. Zomato targets to break even by the second quarter of FY24.
  5. Coal India Ltd, buy or sell
  6. Market capitalization-Which companies qualify to be in my portfolio?
  7. Avenue Supermarts Ltd| DMart | A high-growth company with an opportunity to invest
  8. छोटी-छोटी आदतों से खुद को सुधारें
  9. Power of subconscious mind. Explanation .आपके अवचेतन मन की शक्ति|व्याख्या हिंदी में| Treasure house within you| आपके अंदर निहित खजाना| Chapter 1

Books recommended

Power of Subconscious Mind by Dr. Joseph Murphy

आपके अवचेतन मन की शक्ति

Disclaimer- All investments and trading in the stock market involve risk. Any decision to place a trade in the financial markets, including trading in stock should only be made after thorough research. Trading strategies or related information mentioned in the article is for informational purposes only. Use your due diligence before investing

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