Is the Stock Market a Battle Zone for You?

The stock market is a venue for companies to raise funds to grow and expand. This serves a very useful function as capital markets exist to promote enterprise and entrepreneurship, and offer another way for companies to garner capital (other than just through loans from banks). Hence, the stock market acts as a platform for investors to co-own part of a company and enjoy its growth and fruits of labour.

However, some investors may view the stock market with different eyes, and this defeats the purpose of investing in it as their attitude may lead them astray. Here are three views of the stock market which one should avoid having.

The Stock Market Is a Competition

Many investors have something of a competitive streak within them, and this translates into constant comparisons against others when it comes to investing. These investors treat it as a competition in which they have to try to “win” the rest to make themselves appear rich, capable and successful. As a result, investing degenerates into a mindless battle for ego and pride. This senseless competition ends up causing investors to make rash investment decisions to try to get ahead, without subjecting such investment ideas to calm and cool assessments.

The Stock Market Is A War Zone

I have heard other investors refer to the stock market as a war zone, where survival is necessary and that every day is a “battle”. These investors will, therefore, arm themselves to the teeth to do battle and to ensure they survive to the next day.

By taking this view of the stock market, these investors perceive the stock market as an “enemy” which should be “defeated”, but the real enemy is the investor himself as he has to fight against emotional biases and mental impulses. The stock market is merely an avenue for transacting, and should not be treated as something akin to war or battle.

The Stock Market Is A Casino

This is probably the worst way of perceiving the stock market, as the investor here resembles more of a gambler. This group of people treat the market as a lottery where they place random bets, hoping to strike it rich. They will also act on every hot tip or rumour in the hopes of making a killing. The reality is such an attitude will usually make the punter end up much poorer as they will be trading frequently (and increasing their brokerage costs) and also buying into the hype which will result in losses.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.