Why People loose money in Stock Market?

Investing in stock market is not an easy task. It requires a lot of understanding about financial statements and price action analysis. Now the most common reason for people losing money are:

1. Not able to decide investment goal

It is always necessary to decide goal for a particular investment. The most common and essential requirement of financial planning.

2. Unable to get adequate knowledge:

This is the most common reason why people lose money in stock market. Whenever we start a business we do and analysis of market condition and product. Before investing in stock market it is always advisable to get knowledge.

3. Stock selection:

The most common mistake that people do while investing in stock market. Companies having strong financial background and good corporate governance with strong business model should be selected. Penny stocks are highly risky and we should always avoid investing in Penny Stocks.

4. Fear Of Missing Out (FOMO):

People lose money in stock market because they think they have lost an opportunity. Sometime people do not take adequate risk of investing at proper levels. So it is always advisable to have a mentor before you start studying stock market who will guide you in a proper way.

5. Always have a proper strategy:

It is not possible to have 100% accurate strategy even the best investment managers are not 100% accurate therefore we should invest according to back tested strategy with proper risk management. We should not book profit early and have patience to see the target as per the defined strategy.

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