Are you ALSO losing money in stock market?

Many of my friends invest in stock market directly or indirectly(through mutual fund or ULIP), but very very few will acknowledge they have made profit out of it even some people say they haven't heard anyone making money from stock market.

So why people don't make money from stock market whereas its considered to be the best asset class to invest for long term. If you are one of those who have heavily burnt their finger and concluded stock market is not the place to make money, check If you have made any of these mistakes:
  • You follow Sensex or Nifty index in TV or Newspaper or websites(like money control)and say market is up or down accordingly.
  • You buy when market is in bull run, all positive and optimistic and sell when its the opposite
  • You buy or sell stocks on free advice by experts in TV(in channels like CNBC) or newspaper or your broker
  • You have entered the market with the intention of making quick and easy money 
  • You only read stock tips and price targets in research report or stock recommendation
  • You don't remember all the companies you own(stocks in your portfolio)
  • You can not write at least 1 full page(500 words) for each of the companies you own
  • You have bought a share which you have never heard of till yesterday
  • You consider 3 months is long term investment
  • You don't know the difference between trading and investment
  • You think a stock quoting Rs 10 is cheaper than the one quoting  Rs 100
  • You feel a stock quoting at Rs 5 will appreciate faster than the one quoting at Rs 2000
  • You consider IPO is the best way to make money in short time. 
  • You daily spend more than 1 hour watching TV or websites to track the price of the stocks in your portfolio
  • You track only the trading price of the stock to buy or sell
  • You chase a stock to buy when its price is going up, but don't dare to touch it when the same one goes down by considerable amount.
  • You don't know the difference between mutual fund and ULIP but have both in your portfolio
  • You have either less than 5 or more than 20 stocks in your core long term portfolio
  • You have never read the annual report of the companies you own
  • You don't know the basics of reading the results or balance sheet of the company 
  • You don't track even the quarterly result of the company which you have bought for long term
  • You never buy a stock once its appreciated by a good amount but you average a falling stock many times.
  • You buy or sell a stock in lump sum(suppose you want to buy 100 shares or 10k worth of one stock, so you buy the whole lot one time and sell one time)
  • You believe more risk results in more gain
  • You don't know the difference between bonus shares and split but buy before the ex-date to get more shares.
  • You are emotionally attached to some stock or brand and not able to sell them
  • You have become long term investor in a stock from buying it for trading as it went down
  • You feel the stock you buy goes down or it goes up when you sell
Unfortunately most of us fall into the above traps and ultimately blame the market and conclude stock market is not the place to make money. Buy the companies If you understand the business, otherwise for retail investors the best way to participate in market is through SIP in mutual fund. If you don't understand SIP or mutual fund, you can do a little bit of research or be happy with fixed deposit.

Let me know (through comments) If you have made any of the above mistakes and want to understand or clarify more about the same or how to avoid it.

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