STOCK MARKET #03

EPISODE #2

STOCK MARKET :

01 . PSYCHOLOGY OF SHARE INVESTORS

The psychology of share investors involves studying how investors think, feel, and behave when making decisions about buying, holding, or selling shares in the stock market. Behavioral finance, emotional factors, investor types, and investing strategies all play a role in shaping investor behavior. Understanding the psychology of share investors can help investors make better decisions and avoid common mistakes that can lead to losses in the stock market.

Anybody can make mistakes in share market , but some investors continue to increase the mistakes. If you have bought a stock and its price decreases, then do no buy more stocks to reduce the average buying price. Investors try to reduce their losses by purchasing shares at low cost. However this strategy is not in the falling market . If you purchased any wrong stock then there will be significant loss.

02 . STOCK MARKET IS NOT GAMLING

You are correct, the stock market is not the same as gambling. While both involve risk and uncertainty, there are some key differences between the two.

In gambling, the outcome of the game or activity is determined by chance, and the odds are typically stacked against the player. In contrast, the stock market involves investing in companies that are expected to grow and generate profits over time, based on fundamental factors such as financial performance, industry trends, and economic conditions. While there is always some level of risk involved in investing in the stock market, investors can use a variety of strategies to manage their risk and potentially earn a return on their investment.

It is important for investors to approach the stock market with a long-term perspective and to make investment decisions based on careful analysis and research, rather than simply relying on luck or speculation.

03. STOCK MARKET : RISK AND INCOME

Investing in the stock market involves both risk and the potential for income. The stock market is known for its volatility and unpredictability, and it is possible to lose money if you invest in the wrong companies or at the wrong time. However, investing in the stock market also offers the potential for income through capital gains and dividends.

Capital gains occur when the value of your stock increases over time and you sell it for a profit. Dividends are payments made by companies to their shareholders as a portion of their profits. Both capital gains and dividends can provide investors with a source of income, although they are not guaranteed.

It is important for investors to understand the risks associated with investing in the stock market, including the potential for loss of principal and the impact of market volatility on their investments. It is also important to consider factors such as diversification, asset allocation, and risk tolerance when making investment decisions in the stock market. With careful planning and a long-term investment horizon, investors can potentially earn income and manage risk in the stock market.

THE GLOSSARY :

1 Stock: A share of ownership in a company.

2 Index: A measure of the performance of a group of stocks.

3 Bull market: A market in which stock prices are rising.

4 Bear market: A market in which stock prices are falling.

5 Dividend: A distribution of a company's earnings to its shareholders.

6 IPO: INITIAL PUBLIC OFFERING, THE FIRST TIME A COMPANY'S SHARES ARE OFFERED TO THE PUBLIC.

7 VOLUME: THE NUMBER OF SHARES TRADED IN A DAY.

8 BLUE CHIP: A LARGE, STABLE COMPANY WITH A LONG HISTORY OF RELIABLE PERFORMANCE.

9 BROKER: A PERSON OR COMPANY THAT BUYS AND SELLS STOCKS ON BEHALF OF OTHERS.

10 MARKET CAPITALIZATION: THE TOTAL VALUE OF A COMPANY'S OUTSTANDING SHARES.

THANK YOU!!