Here’s Why People are Afraid of Investing

Investment is a long, well-studied process wherein an investor needs to estimate the valuation of the stock viewing the external factors
  • BY Jaspreet Kaur

    Feature Writer, BusinessEx

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  • Apr 02,2019
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  • 9 Mins Read

As the economy has progressed, new ways have emerged to multiply your income. Earlier on, fixed deposits and LIC were the only few prominent ways to gain interest on your savings but with the passing time, new modes like investment, stock and bonds have also come in the picture. 

Even after the availability of larger investment options, many people still adhere to fixed deposits and other government policies to gain interest on their savings. Owing to a lack of knowledge and misperceptions, people don’t purchase stocks or go for investments in for-profit organizations. Primarily, there are plenty of reasons as to why they are afraid of investing in stocks.

  1. Devoid of Investment Know-How

People with non-investment backgrounds don’t understand the worth of stocks. They presume that buying stocks is a risky deal and thus, they avoid going near and instead opt for other safer investment options that may be lesser in terms of returns.

As a result, advertising and promotions done by the financial institutions become ineffective as only few learned investors repeatedly come and procure dividend stocks.

  1. False Belief Regarding the Investment

As financial companies don’t educate the masses about the investment, the common folks hesitate to procure stocks even when the investment schemes are alluring to them. Originally, it is the misperception amongst people that academic knowledge is required for dealing in investment stocks.

Though, a degree does not qualify or certify an individual to deal in the stocks. Anyone can trade in stocks with minimal knowledge which can be received from viewing share market. 

  1. Lack of Investment Skills

Investment is a long, well-studied process wherein an investor needs to estimate the valuation of the stock viewing the external factors. If a particular stock is sold at INR 100 presently, then the investor should think what the valuation of the stock would be in future. Likewise, a first-time investor needs to ask all these questions and then decide to acquire stocks of a particular company.

Another aspect that the first-time investor should possess is patience. The non-investment folks primarily lack patience. For achieving success in stock-related deals, an investor needs to be watchful and foresee things beforehand so that he can make profitable deals. 

  1. Dealing in Stocks is Time-Consuming

Essentially, stocks with higher potential are bought by the investors and eventually sold out after the rates spike. This process takes time and sometimes, more than the usual; thus, people find it boring and abstain procuring from the stocks.

For conducting profitable deals in stocks, an investor ideally needs to procure undervalue stocks and sell themwhen he believes that the stocks have risen the highest. For understanding this technique, an individual needs to actively participate in the business sphere.

The aforementioned problems are being faced by people who think of investing in dividend stocks.

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