Why Investors Seldomly Make Money in the Stock Markets?
We have compiled few tit bits as reasons, due to which investors (traders always lose on net basis) are seen rarely making money in the stock markets.
> Crowded Portfolio- Have over 20-24 stocks in the Portfolio, thinking that higher number of stocks, gives higher gains.
> Keep Averaging- On a small fall of 2% to 4%, add more quantity of same stock, thus exhausting funds.
> No Respect to Stock Allocation- Seen micro caps, having 10% of PF in 1 stock, which should not be over 2%. Conversely, HDFC Ltd kind of stock, deserve to have 12% of PF, have in single or double unit.
> F&O Losses- F&O losses, (which gives losses in over 90% trades), are financed by selling either (by Broker or by traders) quality blue chips.
> Fancy of Low Priced Stocks- An investor thinks that a stock ruling at 10-20, can double in 3-4 months, due to low priced. But it is a great myth, while same mistake is done by majority, at all the times, in a Bull market.
> Too much Reliance on Media and Experts- Investors remained hooked to Business Channels, and act on Tips given their by Anchors and Hourly experts, as they only suggest rising stocks of that day for buy and selling of weak stock, due to vested interest and lack of fundamental knowledge.
> Investing based on Technical and not on Fundamentals- This is the foolish and most unprudent way of investing.
> Too many Commodity stocks in PF- An investor must not have over 15% of PF in Commodity stocks, which is seen crossing 50% to 75%, thus having more Cyclical and less Blue Chips or Stocks for all Weather, in the PF.
Not Booking Profits- An investor turns a LT investor, when stock is giving good gains, due to greed. Similarly, will not hold a fundamental strong stock, when it falls by 2% to 5% due to Fear.
Periodical Review of PF- Thy do not do Monthly or Quarterly review of PF. In loss making PF, will sit by puting hands on Head, In profit making PF, will fly in the Sky all the times, and will not book gains. Both the situations, give no time to review.
These are just few pointers, while list can keep extending, as it is seen much exhaustive.
This is not a buy or sell recommendation, while stock recommendations are provided exclusively to our paid members in the Member Zone.