What Makes You Shy Away from Stock Trading?

The stock market is rallying.  This has happened due to a variety of reasons.  For instance, the technology sector has been bustling with a lot of commercial activities that resulted in huge earnings for the technology firms.  Moreover, the rate of employment in the US has shown signs of improvement that contributed to this rally in the stock market.

Though the stock market now spells good prospects for the companies as well as for the investors, yet most people prefer to stay away from it, especially when it comes to stock trading.

A Peep Into the Investor’s Mind

Different people have voiced different reasons for opting out of stock trading.  However, one of the prominent reasons amongst them is the fear of incurring a loss.  Apart from that, many investors have also cited the lack of knowledge to get started with such a mode of trading in the equities market.

In addition, others have reasoned that either they don’t have sufficient funds to invest in the stocks or that they don’t prefer to do it at all.  There is no doubt that these people have shied away from stock trading just to protect their finances and financial stability.  Still, the reason to justify their abstinence isn’t at all that serious.

“Shying away from a smooch and not from stock trading”.  She’s shying away from a smooch by harttmlp, on Flickr.  This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.

Why People Steer Clear of Spending Their Money in Stock Trading

Here are some of the reasons that compel people to avoid stock trading:

Lack of Necessary Funds

A lot of people stay away from the stock market due to shortage of fund.  People say that they don’t have sufficient amount of cash at their disposal to invest in the stocks.  However, one of the crucial factors to make it big in the world of investments, be it stocks or any other asset class, is to devote ample amount of time towards them.  This is because experts have opined that stock markets have a tendency to provide around 10% return on investments when they are dealt with for an extended period of time.

As a general rule of any investment, investors must build up a reliable amount of nest egg before foraying into the financial markets.  So, what every individual must do is to stack up around 3-6 months worth of monthly household costs as savings to mitigate total financial loss in case of a turbulent stock market.

Use of Professional Help

In many instances, people have said that they participate in the financial markets (here, the stock market) but with the help of investment professionals like financial advisers or stock brokers.  Though taking advantage of their expertise is definitely one of the ways to make investment decisions, yet they aren’t always the best substitute.

This is because these professionals levy service fee for doing what a layman can do all by himself and that, too without investing a dime.  On top of that, online stock trading, for example, isn’t that much of a complex task to do.  Then why pay a financial adviser to learn doing it?

Unawareness of Investment Knowledge

It is very likely for a person to be ignorant about the basics of stock trading.  It’s a fact and it’s accepted.  However, for those who consider it to be a reason for their apathy towards such an investment option, then it is for them to know that there are lots of excellent do-it-yourself websites such as E*TRADE Australia, who can help them with stock trading through the E*TRADE online trading, from where they can get a solid foothold about stocks and learn other investment-related technicalities.  Additionally, there are endless resources available on the Internet that teaches people, how to invest in stocks at no cost at all.

Finally, there are some who consider it to be wastage of time or rather meaningless to put their hard-earned money into something as risky and volatile as stocks.  On the contrary to this belief, one can create a simple online brokerage account and purchase some single index funds that follow companies listed in the S&P 500 and keep them lying till the time he/she needs it.  There is no bar in the amount of time that is devoted in the stocks but then it isn’t compulsory at all.