Dark secrets of-stock markets-that are unknown to ordinary-traders:

Dark secrets of-stock markets-that are unknown to ordinary-traders:

1- Timing is Everything:

Its always good to invest in stocks but it would be worst decision if it was during 2001-2002 IT bubble, similar way investing in Real Estate would be worst decision if it was just before 2007-2008 financial crisis due to real estate boom. 

Legendary Nathan Rothschild: "The time to buy is when there's blood in the streets."

Be Warren Buffett once said that it's wise for investors “to be fearful when others are greedy and to be greedy only when others are fearful.

Ensure stock value should come down due to economical factors not due to fundamental factors.

2-Power of Compounding:

Albert Einstein once said “Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it”

It helps in multiplying the principal amount by a huge margin over time. you earn dividend on your principal amount, and the dividend is added back to the initial principal amount again, increasing the potential interest for the next cycle.

3-Crowd follows Crowd:

An investor’s natural instinct goes with the ones of masses. 

In today’s world, the dangerous media can make or break a nation.

It is one of the most important driving forces in our socio-economic as well as political domains.

If you come across a negative piece of news about the stock market on television or in the newspaper, it would definitely have an impact on you.

You would obviously be upset and would ponder over what might happen if things go as forecasted by the media.

4-Embrace Diversification:

Even Warren Buffets' Portfolio stocks would not be 100% accurate, these investors create diversified Portfolio from stocks to Real estate etc. Diversification helps to mitigate the risk. We all heard the below phrase but often fail to implement:

"Don't put all your eggs in one basket." - Proverb

5-Big Players and Losses:

Stock price rises through stairs and falls through elevator so always be prepared for quick exit.

Don't invest all money you own into stock. Stock Market Trading is similar to a fierce fight between YOU vs. Mike Tyson, Muhammad Ali, Rocky Marciano, Manny Pacquiao, etc., altogether simultaneously.

At least in boxing, you will see who is punching and from which direction punches are coming.

But in trading, you don’t get a chance to see these punches from experts.

2-Understanding Intrinsic Value:

Market moves with sentiments and moods. Identifying and investing in fundamentally strong stocks helps you remain disciplined and rational in volatile market.so Let not emotion dictate your decision. Avoid buying over valued stock.PE Ratio and PB ratio would help to identify the worth

Below are other investing secrets i have learned over period of time:

1.         People who really make money from the stock market, don’t brag on social media.

2.       People try to sell videos/courses to recover their losses.

3.       People who recommend stocks, don’t buy those themselves.

4.       People who are teaching stock investing, are actually making money by selling courses, not trading stocks.

5.       Live trading, live P/L account is just a myth. There is software that can simulate whatever you want.

6.      Most of the stock market millionaires and billionaires do some kind of insider trading.

7.       Experience is the best teacher.

8.       You don’t have to learn about thousands of companies. Nobody has that kind of capital to invest. If you have, then why won’t you put it on an index fund?

9.      You need money to make money in the stock market. You can’t just multiply.

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