4 mistakes in the stock market

Introduction

When you are starting in the stock market you will be doled out a lot of confusing advice someday you will read that warren buffet said that we are in a bull run and then you will imagine that we are in a bull run and you will start investing money then peter lynch will say the next day that no we are not in a bull run and the debt market is going to go up and the stock market is going to tank similarly there are contrary positions that even ace investors like warren buffet, peter lynch all of them take right so if you hear their opinions you will end up getting confused don't get me wrong, it's great to learn from them but sometimes as a beginner in the stock market we end up absorbing so many different things that it confuses us and we end up making a massive number of mistakes so on this blog I am going to cover five specific mistakes that beginners in the stock market usually make even if you are an intermediate level player in the stock market do read to this blog. It's going to be very important.

making investments based on news

The first key mistake that you are going to make in the stock market is that you are going to make investments based on the news so please do not do this please understand that many times the news is manipulated, please understand that many times the media outlets are owned by major conglomerates therefore many times you will see that if something is going wrong with a major business house in India it will not get covered in any of the media houses or if a major business in India wants to give out certain kind of news then they can easily push it because they themselves own the media so these type of things happen all the time and sometimes financial writers write things in a very incorrect way by reading these headlines you will start panicking that you know what something bad is happening and I should get out of this stock that's precisely what happened that many people sold their stock after the news but this is how reporting is done

It really can confuse you and it can make your life difficult so always double-check multiple sources for news understand and interpret the news correctly don't just simply go by headlines and don't trade on stocks either buy or sell on stocks just given the news right that's one of the key mistakes that you will make that's one of the key mistakes even I made when I started my stock market journey so please understand it so what are some good sources to consume.

Not investing in value stocks

The second key mistake that you will make in the stock market is that you will not invest in value stocks. Now value investing is a simple philosophy I will explain it in a very easy to understand way now essentially whenever you are buying any business it can be a large cap business it can be a mid cap business it can be a penny stock it can be a small cap whatever right whenever you are buying any stock be it ITC, HUL Tata Motors whatever business you're buying what are you doing is you're buying a business right it can be large cap small cap whatever cap it doesn't matter right you are investing your money in a business value investing simply says that you should buy a business that has high prospects of growth in the future that is the same philosophy that every as investor uses in very simple terms whenever they are making an investment in any business be it a startup be it a listed company be it an unlisted company they are going to understand the growth potential of this particular company its important point for you to understand is that whenever you are going and investing your money in any stock please understand that you are investing in a business that is likely to grow right so understand future prospects of it future simply means there is certain horizon that you are okay holding that stock for it could be one year it could be six months it could be five years so define that horizon understand whether this business will grow in that horizon or not and then make a call right many a times what we do is that we just say and we expect people to tell us multibaggers there is no such thing as multibaggers there are good businesses that are likely to grow in the market and then there are bad businesses that will not grow.

Not understanding the assets you are buying

The third mistake you will make in the stock market is that you will not understand the assets that you're buying now I am a big believer in cryptocurrencies and I openly advocate that if you're young if you're investing your portfolio in an aggressive manner then you should have little bit of exposure to cryptocurrency, now when I go and speak with people that hey what do you know about bitcoin where is it deriving value, what do you know about ethereum, what do you know about nfts they will not understand anything they will just simply say that you know because Elon Musk tweeted something therefore we bought it, now he's probably getting out of cryptocurrencies therefore we are selling it if you don't understand this basic stuff then it's a problem. When you're getting into assets you should have minimum understanding about it.