As per a report, India has only 20 million active trading accounts in the share market. The population of the country is around 136 crore in 2021. The stock market investors occupy a small portion only. In India, generally, people hesitate to enter the stock market. The interest areas for investment for the investors are mainly real estate, gold, and other properties.
The common fear among the investors that pulls them behind from investing in the stock market is the loss of funds due to market fluctuations.
Here, in this article, you will find a few common fears that restrict you from investing your money in the stock market. So you can learn about stocks.
Fear about money lost in the market:
Generally, people think that the money they are going to put in the stocks will be lost due to uncertain factors. This fear is true up to an extent. The share prices fluctuate due to the nature of market fluctuations.
But, if you buy the stocks and other securities with due care and proper fundamental and technical analysis, you will get a real appreciation in your funds rather than decline. In fundamental analysis, you should analyze the company’s financial aspects and the parameters related to industry and the country.
In technical analysis, you can check the past trend of the stock. Apart from the past trend, different analysts provide the forecasting for the future prices.
Fear about legality:
Some people do not consider the stock market as a legal platform for investment. They think it is like gambling. In India, SEBI creates the rules for the stock market and regulations for the training and investment in the market. Every online trading account is under the surveillance of the SEBI, brokers, and depositories.
Various documents support the investment in the stock market and making the trading investment in the market a legal activity.
Fear of wrong selection of investment security:
The other common fear in the mind of investors is regarding the wrong selection of stock or other security. The investors have a fear that the selected security may or may not provide better returns. This fear always restricts them from investing in the market.
But, this fear can be removed with the proper hedging and risk management instruments. To avoid fluctuations in equity, hedging instruments can be used. Different margin equities are available in the market that can be used to prevent the risk of wrong securities.
Fear about large funds requirement:
Some people have a fear that the investment can only start with a large amount. But it is not true. You can start your investment with a tiny amount or say even with a share. If a large amount collapses in the investment, then it reduces the faith in the investment. You can invest your small amount of funds in mutual funds and margin tradings After proper knowledge and enough experience in the stock market, you can try to invest a large amount in stocks and other securities.
Fear about wrong advice:
Those investors, who are new to investing in the stock market, generally take advice from different broker agencies, friends, and consultants. The investors have a fear that the advice is not perfect for implementing in the market.
To remove this fear, the investor should use the technical analysis method and fundamental analysis of the company. Firstly, you need to analyze the trend of the securities, then the advice of your consultant should be considered.
These are some fears that investors feel while investing. Different types of fears affect the investment behavior of the investors. These fears can be reduced with different techniques.