How Do People Lose Money in the Stock Market

Do you know how do people lose money in the stock market? A reader of Return On Investment blog asked this question: “I just invest last week in the stock market, amounting to $250,000. After few weeks I almost lose 5% of my invested capital. What should I do to recover that losses?” Asked by Brian J from Las Vegas, Nevada, USA. 33 Years Old (Office Clerk).We are here not to be sound as stock market experts. We are here just to inform our readers about “how to really invest their hard earned money”. Good thing, the reader who asked this question invest directly in the stock market. Maybe he is already familiar on how to invest in the stock market. Maybe he knows just the basic fundamentals.

How Do People Lose Money in the Stock Market

Now, to answer that question. Here we share what are our response to the reader. First, it is possible to lose money (all your invested capital) in the stock market especially if you don’t know what you’re doing.

Second, you are buying the bad stocks. It simply means you are not reviewing the company management, the services, the products, it’s stability and existence.

Related: Good Stocks to Invest In

Third, you buy stocks and sell it even if the stocks are not making your profit. Imagine if you keep on buying stocks worth $50 and sell it $40 after a month and do it again and again. What should be your results, then? Probably, losing money.

Related: How to Choose Stocks for Long Term Investment

Profitable Stock Market Investing

The best way to making huge profit in the stock market is to study and keep on learning. Analyze the company, read some news but do not make the news or rumors as the basis of your investing success. All you need to do is to keep buying stock shares to a company which you think it will be existing until the birth of your grand children, or 5 decades or forever. This simply means, you should invest only to a company that you are comfortable with and familiar with.