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Hitting The Stock Market

By Sharron Nixon

Republish: EasyPublish™
Published: 13Jul2008
Word count: 971
Viewed: 426 time(s)

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When it comes to investing in the stock market, you would think that most people would know how to manage their money in this area of investment because of the vast amount that has been said and written. The reality is however, that nothing could be further from the truth.

Even though it is pretty easy to access a wide range of financial information these days, successful investing remains a mystery for many people. The biggest problem is not the lack of information, as there is plenty of information around for anyone who wants it. The real issue is the lack of security and predictability, and the way in which people deal with it.

It is a basic wish for people to be secure, and they also like a certain degree of predictability in their actions and investments. But balancing this is their desire to make a profit. The biggest problem is that in order to attain high profits, there is usually a high degree of risk.

Of course, one solution to this dilemma would be to simply put your money in a savings account, collect a little interest and just relax. If this sounds good to you, you are probably better off taking this course of action, and you do not need to read the rest of this article.

So, if you're reading this, you are probably not satisfied with the small returns that you get with savings accounts, and you need your money to work a little bit harder for you.. But you would still like to minimize your uncertainty, and find a certain amount of predictability in what you are doing. I can give you a prediction that has a very high degree of certainty.

If you invest in the stock market, two things are bound to happen. Firstly, you will make money sometimes, and secondly, you will lose money sometimes.

That should at least cover the uncertainty factor. This probably sounds a bit simplistic and if it does, that is good, because the point I am trying to make is very simple. It just is not feasible for you to make money every single time you make a transaction. Even Warren Buffet does not make money on every single investment he has ever made, and you are talking about a master here. The best traders and investors in the world lose money on a certain number of their transactions

On the flip side, it is very difficult to lose money every time you invest. Perhaps you may have heard of some people who claim that they have lost on every investment they have ever made, but chances are they are this is not true . Even these people have made money on some of their transactions, but they probably re-invested that money into other stocks that ended up losing money.

It can be likened to the time spent sitting at a slot machine. After you play for a while the machine will start throwing out a mountain of coins, resulting in a nice profit. But instead of calling it a day and pocketing your winnings, you simply keep pouring money into the machine until the very last coin. Then you go home wondering why good luck never comes your way. The fact is, you did do ok, but it is what you do with your windfall that matters.

It is important to face the fact that losing some money from time to time is ok, and you need to accept that. This does not mean that you should feel ok every time you lose money. You should always have the goal of making a profit, but you need to be aware of the fact that you cannott realistically expect to make a profit every single time. This will ease some of the fears of failing, since losing money on an investment does not mean you are a failure as an investor. Many people never get started just because they are afraid of losing money. And if they do lose money, they feel they have failed and retreat from the stock market in its entirety, never to return again.

If this has not personally happened to you yet, just take a look around. Can you remember a time when either a colleague or a friend would often inform you of their investments? Just about every time you bumped into them they would tell you how good their stocks were doing and how much profit they were making. And then, suddenly, they completely dropped the subject. You never heard them mention it again. And if anyone asked them how their stocks were doing, they would either mumble something inaudible or utter some kind of defensive statement. What is likely to have happened? You guessed it. They lost their money and withdrew from activity in the stock market. They have essentially given up, and in doing so, they have lost. Not because they lost money, but because they gave up.

If you want to be a successful investor, you cannot afford to handle it like that. The thought of giving up surface when things are not going your way, but you should never give in to it. When it comes to successful investing, your attitude is more important than your knowledge, just as this rings true in many other areas of life.

I am not saying that you don't need knowledge, you should always try to learn about investing, at least the basics of how the stock market works. You also need to learn from your mistakes, but you have to realize that you will not be successful 100% of the time. So before you put your money into the stock market, or any other investment for that matter, remember this: You will win some and you will lose some.

Choosing the right stock picks is an art, but there are ways to increase the odds of your success, and you can find out more about this topic by visiting Stock Picks - Hot!

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