Shares/Stock Reasons Why People Lose Money in the Stock Market

Mika

Mika

VIP Contributor
If you have invested in American companies, you might have lost a substantial amount of money because in the last 2 days the US stock market has gone down. Do you know why you lost money, or let’s say why people lose money in the stock market? Here are some possible reasons.

You buy stocks when the prices are high: Generally speaking, people start taking interest in the stocks only when the price starts going up and by the time they put their money in the market, the price is already too high.

You don’t know your risk tolerance level: A risk tolerance level means your ability to handle risks, mainly financial risks. When you don’t know how much risk you can actually take, you will start to panic sell and you lose money.

You buy assets that don’t match your risk tolerance level: You don’t have risk management skills, yet you buy assets that are high risk.
 
Yugocean

Yugocean

Moderator
Staff member
There is nothing to be affraid of the market fall, although it effects economy and hurt people, but clever people buy at such time. American market is purchase well by investors.

The 18th-century British nobleman Baron Rothschild is consider to be the man behind the quote "Buy The Dip" , some of our American friends are burung that time (its not open for non-Americans),they are not fool to buy when price is high, but they buy when price is down.

This is also a reason why sone times there are intentional crashes which are Trap to pure people into investigation companies which are not worth.
 
A

Adams Abraham

New member
When you invest in the stock market, you are investing in companies. Each company has its own story. Some companies are very profitable, some are not. The companies that are not profitable will try to become profitable
 
Jasmine

Jasmine

Valued Contributor
It is true that you lose money in the stock market when you buy when the stock prices are skyrocketing and invest in the stocks that do not match your risk tolerance level. However, these are not the only reasons why you lose money in the stock market. One of the main reasons why you lose money is because of market manipulation. Imagine a big investor puts a lot of money in a certain company’s stocks, normal investors will take a cue and start buying the stocks. When a lot of people are buying, there will be a demand, thus the stock price will start going up. All of a sudden the big investor starts selling, when he sells there will be a lot of supply, when there is supply, the price will go down, and the investors will lose money. This is a common phenomenon in the stock market. Therefore, never buy the stocks that are gaining value all of a sudden. Before buying any stock check the company performance. If the company is not performing well in the market, yet the stock price is going up, this is nothing but manipulation. Panic selling is another reason why people lose money in the stock market.
 
Seema S

Seema S

New member
You should start from small amount and keep an eye . I am sure you will learn much more than browsing.
 
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