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Home » Easy Way to Lose Money in Stocks

Easy Way to Lose Money in Stocks

August 6, 2014 by Ankit Agarwal

We’ve all had that moment in our lives where we start to consider investing a few stocks, sinking some of our cash into the DOW Jones or the FTSE100 group for a nice little nest egg for when we retire or just to make some quick cash from selling off our new assets later.

lose-money-stock-market

 

Although this many seem pretty straight forward, it does comes with some risks that can result in you losing the money you invested. There are a lot of easy ways for first time investors to blow through their cash on the stock market.

However don’t worry as there are a few things you can do to protect your hard earned cash when you’re taking your first step onto the stock market and once it’s actually been invested.

Thinking you can ‘get rich quickly’

First up is to remember that there is no such thing as ‘getting rich quickly’. There are 101 different books, novels and online guides that all claim they can make you super wealthy in the stock market in just “5 easy steps or less”. These of course are absolutely ridiculous claims; for starters it takes years of planning, research into company stock and micro-management of your various assets before you’ll even break your first thousand.

Believing you can ‘buy low, sell high’

Remove this idea from your vocabulary completely as it is not only cliché but its lead to a lot of first time investors losing money very fast on the stock market. This is mainly because the exact definition of what makes a stocks worth ‘high’ or ‘low’ is still a grey area which means that there’s this air of uncertainty of when exactly you should sell or buy more stocks.

A good general rule of thumb is to buy more when the market starts to appear to have an uptrend and then sell when the market seems to become dangerous e.g. when there’s a rapid and steady decline in stock value.

Buying stock when it’s in decline

It’s going down for a reason and there’s no guarantee that it will ever start to go back up in value. It’s the stock market equivalent of jumping aboard a sinking ship. Don’t try to buy stock when it’s declining

Having no limit

You should set yourself a stock price target to keep yourself from future financial loss. For example if you bought your stocks at £30 a share, set your loss at around £25 to £20, that way if they start to drop in worth you can sell them off before they drop any further. The stock market is fickle at the best of times, however it is this unreliability which makes it so appealing.

But if this sounds completely unappealing to you then perhaps it is better for you to spend the money on Bingo sites which can often be safer areas of investment. At least you’re guaranteed a return on your investment from a Bingo game, plus you don’t have to invest much since penny Bingo games are incredibly popular lately.

So in future when you consider investing in stocks, it’s probably worth considering your options first before you make any substantial investments.

Contents

  • 1 Thinking you can ‘get rich quickly’
  • 2 Believing you can ‘buy low, sell high’
  • 3 Buying stock when it’s in decline
  • 4 Having no limit

Filed Under: Stock Markets Tagged With: how to lose money, lose money stocks, stock market investing

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