BCS Express is a user-friendly website for personal investors BCS Express is a user-friendly website for personal investors Financial literacy grows from generation to generation, but some delusions have not gone into the past so far. We dispel 5 legends about the securities market.
1. Sheer deception
Of people, who think the same way, can be realized: among some Russian citizens, the experience of the nineties gave rise to distrust of money companies in general. And even almost all of those, who treats unfamiliar words without prejudice, still not so smart, what is similar exchange, stock, bonds.
For what reason is it not so. Ignorance breeds terror, and horror has significant eyes. But if you figure it out, then everything is very simple.
The most popular product on the securities market is stock. This is a security, which gives the owner the right to participate in the management of the company and receive part of its income. By purchasing a share, you, in fact, buy a part of the company. For example, you will be able to become the owner of the shares of the Savings Bank, Gazprom and other largest organizations of the state and the world. If the company works and earns, then they work together with it and bring income and your funds - as due to the increase in the value of shares in the long run, and in the form of dividends.
The share price is reflected on the charts. The cost is formed depending on the assessment of the company's potential by the financiers, external and internal reasons and other criteria.
The exchange ensures the functioning of the product market, currency, securities and derivative monetary instruments.
Broker - an intermediary between the investor and the exchange.
All activities of brokerage companies and the exchange itself are strictly regulated by the country. Any violations are punishable by law. The government is interested, so that the population expands the range of investments. For example, to attract people to the securities market, the government even introduced tax breaks. For instance, IIS.
What does this mean. So that the myth does not become reality, it is worth paying close attention to the choice of a broker / investment or management company. Better to target serious participants, time-tested.
Understand that, how the securities market works, it is easy to find out about the main tools and methods of investing in them. At the moment, almost every big trade organizer, whether it is the exchange itself or a brokerage company, give you a short-term full-time course. And on our Internet resource you will find a large number of free available information about the securities market.
2. Newbies don't belong here
There is an opinion, that investing on the stock exchange is the lot of experts with extensive experience and financial education.
For what reason is it not so. Anyone can trade on the stock exchange, well, the masters were new in their time.
So that the first experience is not sad, almost all investment companies conduct training courses, seminars and trainings, give an opportunity to practice, try trading on a demo account, before starting work in the securities market.
What does this mean. So that the 1st steps are successful, you should not open a brokerage account with the "purpose of boldly enriching yourself". Read special literature, take courses. Start investing with a small amount and diversify your own portfolio, by including different instruments.
3. Investing in stocks is a casino
Such an opinion is usually expressed by people, who know nothing about the securities market. They think, that making an income on the exchange is just a successful bet on a certain share, and a mistake is fraught with ruin.
For what reason is it not so. Buying a stock isn't much like betting at a casino, however, there are also blue chips on the stock market.
By choosing, what share to buy, the financier evaluates the business opportunities of the company: conditions for carrying out commercial activities, which is supposed to be profit, dangers, which may affect its income.
Short-term price movements sometimes turn out to be random, but in the long term, the company's price tends to a fair baseline.
Gambling, vice versa, are zero sum games. They just redistribute funds from loser to winner.. No price is created.
Because investing is not a roulette game., in which long-term success has very vague possibilities.
What does this mean. Don't recklessly distribute your equity across a bunch of cheap stocks, without doing any research work. Do not invest all your funds in one "hot" promotion.
If you came to the securities market without any knowledge and make decisions, relying on fortune, then you cannot be called an investor, you are a player. Don't come to the market to play – come invest.
4. If I knew the buy-in, I would live in Sochi
Only the one who can earn money on the stock exchange, who has additional information, and ordinary people have no place in the market.
Why is it not so. Most successful brokerage clients are ordinary people., far from big business and politics. When making deals, they are guided by the news, analytics and technical analysis - that is, to that information, which is freely available.
Possessing confidential information, theoretically, you can make a profitable sale or purchase of assets - but this is not worth doing, since insider trading, ie. manipulation of the issuer's securities on the basis of information closed to a wide range of people, in Russia is regulated by the Federal Law "On Countering the Unlawful Use of Insider Information and Market Manipulation" No. 224-FZ dated 27.07.2010. Penalties depend on the severity of the violation and may include a fine, forced labor with deprivation of the right to hold certain positions or imprisonment.
What does it mean. Don't try to build your strategy only on people's recommendations., who “know that, what others do not know "or rumors from the media and social networks. This information may be inaccurate. Consider the risks when obtaining any information, evaluate its impact on the asset and, in any case, diversify your investments.
5. Either everything or nothing
In the stock market, you can either daringly enrich yourself, or be left without pants.
Why is it not so. Certainly, who does not risk, he doesn't drink champagne. And risk, along with profitability, are the two main determinants in the stock market.. The greater the profitability, the greater the level of risk. However, earning income on the stock exchange is a deliberate choice of the ratio of these criteria.
A successful investor is not the same, who closed one trade with a profit, and who receives this profit for a long period. No intelligent investor will invest in a single asset, who will determine the fate of his capital. If he takes risks, then there are serious reasons for this risk.
Consider the story of investor Michael Burry, which formed the basis of the film "Selling for a Fall". He is known for, which was one of the first to predict the fall of the real estate and mortgage lending market, which caused the financial crisis 2008 G. Burry then worked as a manager of the hedge fund Scion Capital and in 2005 G. insured about a billion dollars of his clients through a credit default swap. Then such a bet was considered crazy, and the fund's investors intended to sue him. In three years, in 2008, he earned for his fund $700 million (489,34%) and personally - $100 million.
However, behind such a decision of the investor lay a reasonable economic analysis of the situation in the US mortgage market., not just speculations or rumors.
What does it mean. Do not confuse stock market from the casino and don't put your eggs in one basket. Desire to turn $5 000 in $40 000 in a short time can cost you dearly. Certainly, you can make a profit above average, but you must remember, that there is a high income in stock trading, usually, associated with high risks. When you first come to the market, do not count profits - control losses.
Important news awaits you here, forecasts and investment ideas, teaching materials, serious analytics and easy reading, as well as a lot of convenient services, including calendars of dividends and buybacks.
