While talking with my friend, The Market Capitalist, the other day, I had an epiphany. I finally “got” the stock market. I understood what it is all about. In my opinion, investing in the stock market is an opportunity. But, it is an opportunity that does come with risk.
That word “risk” can scare a lot of people off. It can make them turn around and head for the hills. But that word needs to be put into context.
As a person, we “risk” everyday. We drive 65 mph down the freeway to get to work in a vehicle that can be dangerous, if you are not careful. If you plan ahead, make good decisions, pay attention to your surroundings and use your signals; Your daily drive to work will be smooth sailing. I feel that the mentality is that people need to shed the fear of “risk” to become successful in the stock market and investing as well.
The bottom line is that the reality of investing in stock market is you are not going to get rich over night. You are not at the casino “gambling.” There is the possibility of winning that huge jackpot worth millions of dollars at the casino, but chances are you are going to lose more or break even with the money you took with you to Las Vegas or Reno.
The same applies to the stock market. You can get rick quick. It does happen. It happens everyday. But the statistics show whether it be gambling or risk-taking you the chances are not in your favor to win that big jackpot or get rich quick by investing a lot of money into one stock.
“Risk”, Gambling,” and “Fear” are all words that can have negative connotations.
While trying to understand the stock market, I choose to use words like an “Opportunity Cost,” “Ownership,” and “Worth.”
People need to radically change how they think about spending their money. We need to take away the “fear” of investing in the stock market. People need to become more educated with the tactics and solutions to becoming successful in the stock market.
Just some thoughts. You will be hearing much more from me later.