Well, there are some common beliefs of people that I will call myth. It is very important for you to break today if you are entering the stock market because you must have heard these things. These are five such common beliefs that are Put in your mind and after that you think whatever you read that the first thing is that the stock market is gambling.
Similarly, we will talk about other beliefs. So how true is this, how wrongs this, because as I said it is a myth, then why did I say this, I will tell you about it. So first of all, it is written that the stock market is gambling. You ask yourself in your mind that is the stock market gambling? I will give you the answer. Yes, the stock market is gambling.
If you have come to the stock market with a gambling mindset, then people actually say that clothes come off if they gamble in the stock market and people’s clothes do not become, they become commodity if they use the stock market as a wealth creation tool.
So what mindset do you enter the market with, the market will give you the same returns. So if your comet gamble, then you will lose sometimes, you will win sometimes, you will make a lot of money, you will lose a lot of money and what happens in the ending gambling, people lose what happens, they lose it too.
As you saw in Mahabharata, it happened with Yudhishthira, so gambling does not suit anyone, but what is better is that you see the stock markets a wealth creation tool. Now I will give you the answer to this. See when is gambling? Gambling is when we do not know about what we are doing.
If you are playing Rolle, which number will come, I do not know, but when you trade or invest and you know why you are doing it, you trade according to risk to reward ratio or you are investing in good companies which are fundamentally strong, then your money will increase.
Why will it increase? There are reasons for this. The first reason is that if you are investing, then you know that inflation is increasing, inflation is increasing and the stocks are limited, they are assets. So now if one thing is limited and inflation is increasing, then its value will increase anyway and if a company is continuously making profits, generating profits, then also its share price will go up, then the price of stocks in the stock market goes up, especially of good companies, but most people do not invest.
If you invest, then money will be made and if you trade, you can make money from trading, but I always say that people earn money from the thing that is their regular work. So if your trading is a regular job, then you will make money from it. Your regular job is video editing; you will make money from it. Your regular job is accounts; you will make money format. What is your regular job? But sometimes you just want to try your luck.
Today is Thursday and it is expiry, we can trade options at a very low price and today we will do gambling. So what will happen in gambling? Sometimes you win and sometimes you lose and most of the time you are going to lose money in gambling. So this Isa myth that the stock market is gambling because gambling is when your mindset is gambling.
If your investment mindset is or your mindset is that I can do my regular work, I can earn money by trading, then trading is a business. You earn money from your business, from your profession and for that you have to see the time and also learn. So the mindset you come from, the stock market will work for you accordingly. So this was the common belief. I hope you got the clarity. Let’s talk about the next belief and that is that the stock market is very risky.
So the answers yes, the stock market is very risky. It is very risky. You must have heard that when we invest money in equity in mutual funds, then equity mutual funds are risky. Debt mutual funds are less risky, but you have heard one more thing that the more the risk, the more you get the reward. So you have heard that the more risk you take, the more the probability of earning a reward. Some people will say that if there is risk, there is love.
Althing’s are fine, but let me explain to you why. See why is it risky? Because what happens in the stock market is that the game of demand and supply Isa very big thing. What is demand and supply? The stock that will keep on coming, people want to buy it and the demand is coming, its price will go up and if someone has a lot of quantity, let’s assume that someone has a lot of grains, let’s say a lot of sugar is there, he has stocked it and if he sells it, then what will happen?
Its rate will fall in the market and because the rate falls, the rate of stocks can also fall. It can fall, but ultimately the companies whose growth is good, are fundamentally strong, their demand will come again tomorrow. So what happens is that if in the market, in an adverse situation, you see good company’s stock falling, FII has sold it, DII has sold it, foreign institutional investors have sold it, domestic institutional investors have sold it because they have thousands of crores of rupees. Despite that, if the company is good, it will go up again tomorrow.
Again, demand will come again because the demand for good companies’ stocks is always there. It is risky if you invest money in penny stocks, invest money without your research, invest money in small cap companies, then some companies will sell and some will not sell. This also happens, but you have to understand that Warren Buffet says something here. Some people think that if we buy shares of a company, it will increase, we will sell it.
Warren Buffet says that if you can’t wait for at least 10 years after buying a company’s shares, then don’t buy it for 10 minutes. Means if you don’t have patience for 10 years, then don’t investing a company’s stock for10 minutes. If you put money in a company, let’s say you put money in Reliance or Asian Prints. Now you know what those companies do. So if you know what Asian Print does, how it is, if you can’t hold it for at least 10 years, then don’t buy it for 10 minutes.
But if you think that the company will grow in 10 years, if its rate breaks today, it will increase again tomorrow, then you are going on the right path. So you have to understand that the stock market is risky, no doubt, but this is a myth that if you invest in good companies, then we will have to take a risk on our money. I will not happen. If you have faith in the Indian economy, then I feel that betting against India for the next 100 years is a stupidity. We are going to grow India together.
In the coming time, India will grow and the economy will be stronger because the economy will be strong. Good companies of India will go up. The best of India in Nifty 50, the top 50 companies of India will group. So our index will also go up. So ultimately your investment will increase. So I hope you got clarity on this too. People say that the stock market is very risky.
If you investing good companies, then you have to understand that for a short time, you may see the share going up and down because in a straight line, the share does not go up. The share always goes up and down. It goes up and down. It goes up and down. So ultimately you will get risk. Next belief of people is that we need a lot of money to make money in the stock market.
If we have 10,000 today, then what will happen with₹ 10,000? What will happen with 10,000? But I hope you have understood SIP, Systematic Investment Plan. It means that if you make a continuous investment, even if itis of 500, and because you know that you get returns from the stock market. If we talk about an average of Nifty, then according to 15%, Nifty gives money.
So if you invest money in Nifty ETF or in index funds and you get a return according to 15% and even if you are investing 500 a month, then within many years, that money can be millions or even crores. So it is 500, whether it is 5000 or 10,000. If you invest, then it is a good habit because most people investing the stock market. I will take an example because I told you that inflation is increasing.
If you have 10 lakhs today and you keep that 10 lakhs with you, keep it in your bed, there is storage in the bed of people, so keep it in the bed and you forget it for10 years, then what will happen, even after 10 years, 10 lakhs will come out. Butte rate of petrol that you are seeing today is 100, it will not be 100 after 10years.
The gold rate you are seeing today is 50,000, it will not be 50,000 and it was exactly 10 years ago. 10 years ago, the rate of petrol was 30, 40. 10years ago, if we talk about the rate of gold, it may be 20,000, but if the rate has increased in 10 years, then the rate will increase in the coming time. If you do not invest your money, then you lose the value of your money.
So you don’t need a lot of money. Start with a small amount of money, but put a habit. Today you will put a little money, tomorrow you will earn more, you can invest more money. So this is the belief number3 that you need a lot of money to earn a lot of money, but you actually need discipline. Remember what you need, discipline. The fourth belief of peoples that when the market is down, then you should not invest. The stock market is going down; you should not invest.
Warren Buffet has a very good quote. I say this many times. He says that you become greedy when everyone is scared and you become scared when everyone is greedy. It means that when everyone is scared, the market is breaking, then you have Tobe greedy because from here you are getting those stocks that were expensive before at A very low price. Their valuation is getting right, so if you are getting any stock under value, then you can buy it when the market is down.
And it is also said that invest in red to you enjoy the green. If you are going down in the market, then you will invest, so you will enjoy the green. It has happened with me that whenever there is a slight correction in the market, I put the investment down and I have told you many times about it. I have shown you in fact, so this thing works 100%. It is not that when the market is going up, you have to invest only then. You can definitely invest.
People earn money in bull run, but when the market is down, then at that time, if people are actually fearful, then you can become greedy. At that time, you can learn how to identify the stocks. If you are getting stocks on the right valuation, you are getting stocks of good companies, then you should invest in them. So according to me, when the market is down, then it is a good time to invest. Let’s move forward. So we were talking about the fifth belief and that is you need lot of knowledge.
Okay, some people definitely if they come and talk about Junjunwala ji, then he is a charted accountant. They will think that he is very educated, that’s why he made so much money. But I take one example of Radhakishan Damari, the owner of DMart. You know that Damari sir comes in the list of the top 100 people in India, but do you know that he went to college in the first year and then he dropped out. After the first year, he left college, left studies and entered the stock market.
So he did not study a lot. So it is not that you don’t have to study, you have to study, but it is not necessary that you have to study finance. You have to learn things about the stock market and there is no need to have big degrees for it. Today, you are from any background, brother, earning money, making money and growing money is your fundamental righto learn like this. No degree will tell you how well you manage money. There are many such charted accountants who do not manage money well and live a normal life.
And then we have examples like Rakesh Junjunwala, but Warren Buffet says that if you have to study lot and a lot of educationist required to succeed in the stock market, then I would have to go again to sell newspapers because there is no need to learn a lot of things here. You can see the whole playlist. You will get to learn lot of things that you need. So today you will get clarity on the common beliefs of people that you do not need a lot of knowledge of finance.
You do not need a big degree to make a lot of money in the stock market. You just need to understand the stock market and you can easily do that. You can learn that by taking sometime. I told you that we have made a playlist. When the market is down, then this is the belief of people that they should not invest, but generally it is said that investing red to enjoy the green and Warren Buffet also said that become greedy when everybody is fearful. Apart from this, you need a lot of money.
One more belief that the stock market is very risky. I hope you have got clarity on this and finally we talked about the first belief that it is gambling. Gambling is for those who come from a gambling mindset, but if your mindset is wealth creation, then you are going to create wealth from the stock market.