Investing In Stock Will Not Help You Get-Rich-Quick
However, this notion doesn’t hold water in many cases due to the stock market’s dynamics. At the same time, it’s important to understand real investment on one side and allocating savings on different stocks for alternative income streams and financial security on the other side. Investing in primary assets such as real estate and related structures is what defines “real investment.” On the contrary, investing in secondary markets such as buying stocks is just a strategy to divide savings in order to spread risks.
What’s important to note is that spending money on stocks for future production has its risks. It isn’t a guarantee that one will get rich quickly, neither does it mean that there are no losses involved. The recent example where GTA Technologies lost value from $1.5 billion to close to $100 million is a clear indication of how risky these markets can get.
A get-rich-quick attitude and a short term investment perspective are what have made many rush to the stock market. People believe that investing in real assets doesn’t offer the speed they need to get rich. Stocks have, however, become quite fashionable for many financial advisors to tout to their clients as a way of making some quick money and getting rich.
Another factor that has affected investment in the secondary markets is technology. Technology has brought great awareness of the stock markets and made it easier for traders to pump in money into specific stocks. The fact that most of the essential information is readily available has drastically reduced the period of holding stocks. People are now focusing on studying the market trends and making hurried decisions as soon as they see stock prices falling or rising.
The wavy market trends even make it a challenge for investors to follow up on every stock, resulting in more funds being channeled to hedge funds and other investment managers.
For most investors, the stock market remains a mystery. All the price swings and the nitty-gritty needed to fully navigate the market and come out with good sums has become an expensive affair.
Investing in stocks is also a big risk on its own. There is nothing smooth in stocks. One has to be receptive of the what’s going on and constantly take action to avoid plunging themselves into a financial crisis.