ipl-logo

The Five Biggest Stock Market Myths

1618 Words7 Pages

Review of Literature

Source 1:
(The Five Biggest Stock Market Myths, 2014, The Five Biggest Stock Market Myths Available at: http://www.investopedia.com/articles/02/061902.asp)
The article outlined different myths of about investing and explained how they are not true.
Investing is the same as gambling is one myth. Investing is buying shares in a company which represents ownership of that company, which means the investor will gain part of the company’s profit. Gambling on the other hand takes money from the loser and gives it to the winner.
The stock market is only for the brokers and rich people. No one including brokers can predict what the markets are going to do furthermore the internet has opened the market to the public as all the data and tools what were previously only available to brokerages are …show more content…

“Fifty-seven percent of survey respondents said they are afraid of dying, while 62 percent are afraid of investing in the market and 83 percent of people are afraid there will be another financial crisis.”( Chatzky 2014) But the study also revealed that a small number of people use financial advisers. Dr.Micheal Klein (psychologist) says this behaviour is typical when it comes to fear and anxiety. People deal with anxiety by avoiding the issue; in this case they avoid the stock market. The anxiety and fear towards the market can also be a cause of the market crash in 2008. For many this was a traumatic experience and they will carry this memory for ever. The study believes that the memories will also cloud people’s judgment about the market; they are likely to see red flags rather than the fact that as a whole investing is good, no matter how much evidence proves that investing is good. The study suggests that one way to overcome anxiety and fear is to slowly expose yourself to your fear, i.e. investing a small amount at first or getting help from a financial adviser you can

Show More
Related
668 Words | 3 Pages

The stock market became a new and modern frontier of making money. Increasingly, in the late 1920s, the value of stocks was not based on the market value of the stock. The value was being established by investors’ demand for it. The more money people invested, the greater the market value of stocks increased. Hence, the value of stocks increased through the mid 1920’s, and it was guaranteed that there was no other convincing way of making money.

Read More
632 Words | 3 Pages

However, the “steadily rising price of stocks” on the Wall Street stock market attracted more investors (Give Me Liberty, Eric Foner, pg 786). “Many assumed that

Read More
243 Words | 1 Pages

The stock market was just taking off; it was a new method to earning money quickly. Businesses, companies themselves, and individuals tried to convince the public that the stock market was a safe investment. The sneaky business of the market by businessmen caused a further loss, previous to the crash of the market. By convincing the public to invest in stocks, they had prepared

Read More
520 Words | 3 Pages

This led to the system of ‘Buying on Margin’, which essentially is to buy stocks with loaned money. “The once "thrifty and prudent" American adopted the modern philosophy of "Live now, pay later"”(Alchin).

Read More
1230 Words | 5 Pages

Financial security allows individuals to survive. It ensures that individuals have a sufficient amount of money to buy food and have a place to live. Financial security connects to the idea of “home.” Part of “home” is having a permanent place to live. The comparison of emotional and financial securities, shows that home can be perceived in many ways though seeing other’s experiences.

Read More
1004 Words | 5 Pages

Before the Black Monday historical incident, stock prices were rapidly increasing, because of speculation and inflated values of stocks. “Computers have made it so that everybody can trade now. “(Black Monday Documentary) This era was when computers were new to the stock market, where computers were used to automate trading systems, and they also sold large orders which contributed to a big and steep decline. Automated systems are programmed to execute large-volume trades based on specific market conditions without human intervention.

Read More
755 Words | 4 Pages

The stock market is an easy way to get rich quickly. You could buy stock on a margin, meaning you borrow money from a stock broker to purchase stock and you only had to put down 10% of stock value, this made the stock market very accessible to everyone which is why over 1 million people were invested in the stock market, however buying stock on margin

Read More
1411 Words | 6 Pages

Filled with prosperity and growth, everyone thought the twenties were the start of a great run for the United States. Dr. Dice, a business professor at Ohio State University, predicted that the stock market would continue to gain in the near future, more than ever before (Document 6). But, he went on to say that it would eventually collapse. Not only did he know that it cannot continue to grow forever, but he realized that small investors have begun to take part in the game of stock. He saw that such investors would add to the vulnerability of the market.

Read More
394 Words | 2 Pages

There are other symbols in this short story like the black dot on the slip of paper means that, that person is sentenced to death by the village people battering that person with rocks and pebbles until they die. Another symbol in this short story is the rocks and pebbles that mean, death and sorrow because the whole village including the person’s family has to throw rocks and pebbles at them to kill them. The black box is battered because the box is extremely old and has been around for a long time, in the story the villagers explained that the box has been around since the 1st settlers settled on that land, the black box has been replaced once and has some of the places of the old box in it but that was an extremely long time ago. Mr. Summers keeps suggesting to make a new box but no one wants to do it because everyone wants the traditional lottery to disappear forever but, Mr. Summers insects that

Read More
577 Words | 3 Pages

However after the market crashed, there was concern as to the effectiveness of how the market was being controlled. Due to the instability in the investment community, the federal government had to restore stability and investors’

Read More
1310 Words | 6 Pages

As the market was progressively immersed in the late twenties, the industry was confronting a slope. With the industrial boom, a theoretical fever had spread to those of the general public, who had little connotations with the stock market. For individuals to have the ability to purchase shares of what they were influenced is a fast approach to get cash, they would have to take out short-term loans,

Read More
586 Words | 3 Pages

I. Introduction The stock market and bond market are both way to invest money in our economy. There are many things to consider before investing into one of these markets. For instance, what will you earn on your money or how much risk is involved? The Federal Reserve is a major player with money supply and interest rates, but fractional lending by banking institutions leads to the money supply.

Read More
685 Words | 3 Pages

With the invention of credit, or the ability of a customer to obtain goods or services before payment, consumers could purchase goods beyond their financial means. The stock market also became a popular method of making money, as investors tested their luck on Wall Street and hoped to earn a profit from various business schemes. Document G is excerpted from Harry J. Carman and Harold O. Syrett’s 1952 book A History of the American People and discusses the process of buying a stock on margin, or borrowing money from a broker to purchase stock. According to Carman and Syrett, since the buyer only payed for part of the stock, there was a risk that their stock could lose value quickly. The broker may then be

Read More
1724 Words | 7 Pages

In the Financial and Banking world, there exists a phenomenon called herding. Herding is a mental state characterized by group decision-making, causing people to follow with the majority. As herding is based off the investment choices of others, it has the ability to be both rational and irrational, a boon and a bust. As the future is uncertain, investors often find themselves in the herd mentality to create a sense of security. While there are things that can be done to combat the downsides of the herd mentality, it is in the best interest of investors and people that nothing is done to regulate herd mentality as is group security.

Read More
1444 Words | 6 Pages

Frederick MacCauley documented that fluctuations of the stock market is analogous to the chance curve that could be obtained by throwing a dice (MacCauley, 1925). Oliver (1926) and Mills (1927) provided evidence that the distribution of stock returns is leptokurtic in nature. Random movement and inability to predict stocks prices is found in a number of studies during 1920s and 1930s. Cowles (1933) analyzed stock price prediction made by the 45 representatives of financial agencies during 1928 to 1932 and found that forecasters cannot forecast movement of stock markets. Working (1934) mentioned that stock return behaved like a number in the lottery.

Read More

More about The Five Biggest Stock Market Myths

Related Topics

Open Document