5 mistakes that every beginner makes in his stock market journey. I also made the same mistakes but if I didn’t make them, I would have saves lakhs. Hey guys! This is me, and today we will talk about those 5 mistakes, which you probably are making or will make in the future. Please read this article till the end, you will get a lot of knowledge. Let’s start with the first point,
1. Beginners do not think long-term.
Whenever a person begins in the stock market, they only look at a few months or a year that, ‘if I make this much in 2 months, then that is great, if this much in one year, it will be awesome’. The problem with this attitude is that your mind goes towards some wrong things in the beginning itself. By wrong things I mean, every beginner chase IPO, because there is quick money in IPO, and the probability of getting it is a little faster. You will buy it, then it is issued instantaneously, you made a profit and you took it. So, what happens is you are getting small small profits, can you grow it in future? You apply in an IPO, if you did one today and you do 100 tomorrow, then also you will not get more than 1 or 2 lots, and that too is on chance whether you get it or not.
So, what I did was, in the beginning after few months only I decided that I will do it in long-term only. I will see what is going to happen in the next 10 years with me. And when I kept a view of 10 years, then I realized that there is no point in investing in an IPO. Why should I even waste 2 minutes where I can’t scale anything and I do not have any control? So, these are the things you should think about, that if you are in it for 10 years then what all will you do? Your thought process will completely change.
You must be thinking, who knows what will happen in 10 years? I will tell you something that my father told me, ‘The perception of time increases as we get older’, this means that as you get older, the perception or the feeling of time, speed of time increases. When you were in school, from 8th standard to 12th standard, it was 5 years, it was a long time perception wise so you get the feeling that 5 years is a long time. Now in college, it is for 3 years, 3 years is a long time so you feel it is a long time, we will have leisurely fun. Those 3 years pass away in a click. . So, if you are thinking, who knows what will happen in 10 years, it will finish very soon, time passes away very quickly.
2. getting fascinated by profit screenshots.
You will see screenshots everywhere, ‘earned 10,000’, ‘earned 1,00,00’, ‘earned 2,00,00-5,00,00 -50,00,000-20,00,000-1,00,00,000’. We see screenshots like these. A beginner in this case, which I can imagine, the things we miss is that. If they have earned 1 lakh in 1 day, then how much was their capital? How much margin did they take? How much risk did they take? What are their loss-making traits? We are not aware of that. Maybe they traded with 1 crore and got a profit of 1%. 1% in one day is possible, it is not very difficult. There are so many people on the internet, who do not display their things properly, so many of their screenshots don’t display everything.
Few of them tell everything genuinely but many don’t. So, trusting someone blindly is not the best job. If you know and follow that person and trust them, then it’s fine, but I still suggest that don’t look at other’s screenshots and try to emulate that. Know and understand yourself, see where you want to reach in the next 10 years? How much risk you are ready to take? How much capital do you want to take? What is your financial aim? Make your own journey based on all this, by learning your own risk profile. So, this was the second point. Now let’s see the third point
3. blindly following big investors’ portfolios.
So, this is also a big mistake which I also made. So, Rakesh Jhunjhunwala is an investor, and there was news that Rakesh Jhunjhunwala has bought a lot of shares on DHFL, and the minute it was declared, DHFL’s share shot up, and many people who even I know, invested in it thinking, ‘Rakesh sir has invested in it, so no problem. This share has also dipped, everything is fine, it is NBFC, invest in it’, and slowly and gradually this share dipped down and finished, it still exists but it is a penny stock, and now the news is that Rakesh Jhunjhunwala has lost a very big amount, it is 178 crores according to this article.
But Rakesh sir has a portfolio of 20,000 crores in stock markets. 20,000 crores! So, if you look at the numbers, such a big amount has been invested in DHFL and hence you also invested, but Rakesh sir was playing on ‘high-risk high reward’. The stock market game is very much like a cricket game, where 1s and 2s are shot regularly, sometimes when you feel this is a ball worth a shot, you may try for a six with it, and that is what Rakesh sir did. He tried to hit a six, but DHFL did not do well. You should not invest by looking at someone else’s portfolio.
4. no investing only trading.
A beginner focuses on trading, why? Because they have a short-term focus. Their focus doesn’t go towards investing. So, trading, short-term, intraday, one-day, two-day, three-day, but in reality, from my own experience, I have been trading a lot, it’s going to be 10 years since I am properly in this. I started with investing. If I would have invested, traded also but not ignored investing in starting, then I would have been in a much better situation. Because investing seems slow in the beginning but it picks up gradually. Trading is very fast in the beginning but gradually it doesn’t pick up, and that is the reason why all the richest people are investors, not traders.
Why? Because in investing, money compounds. Money makes money. In trading, you are making money. if you make a mistake then it will be a problem. Start with a ratio of 70:30, if you have 10,000 rupees, invest 7,000 and trade with 3,000. So, this was the fourth point.
5. depending on stock market income.
In our course, many students say that ‘Sir, I lost my job’ ‘I didn’t get the job’ ‘I have these many expenses, I have to meet them, that why I want to buy your course’. We straight away tell them that this course is not for you, we straight up deny it, why? Because I know, they will have only one income source which is the stock market and once he enters the stock market then he will exit as a loser, and this is a fact. We have seen it, that is why we are telling you. If you are entering the stock market, then never depends on its income fully. You must have a side income.
Let’s say you need 30,000 per month. If you do not get it in a month, because the stock market is after all a business, it won’t work perfectly at the beginning itself, if you do not get it, then you will do high-risk trade or overtrade, and that even worsen your condition even more. You must have some different income or you should not depend on its income. You can depend on stock market wealth in the future, but you cannot depend on the income of stock markets. these were the 5 common mistakes, which if you avoid at the beginning itself, then in the future your situation will be significantly better.