*By Eduardo Becker, professor at Saint Paul
We hear a lot about the Stock Exchange. And our brain, due to some mechanism, tends to filter only the things we have already heard or concluded, which, in the case of the Stock Exchange, has a bias that it is a kind of “casino”, with the objective of taking money from small investors and transferring it to evil capitalists. So everything that this person reads and hears about the Stock Exchange can be distorted due to this belief.
“Neither too much at sea, nor too much on land”. The Stock Exchange can, yes, be a place where money is lost and it can also be a place where a lot of money is made. But these things apply to specific types of people and situations.
Time is the secret
As Warren Buffet said, “the Stock Exchange is a mechanism cameroon whatsapp data for transferring money from the impatient to the patient” — this phrase reveals the great secret to creating wealth on the Stock Exchange: time.
If we look at the very nature of our planet, we will see that time is the variable par excellence for everything. To reap the rewards, we will have to plant, care for, treat and wait for time to pass until, after a few years of dedication and commitment, we will receive our reward. The Stock Exchange market works like this too: we study, learn to choose good assets and adopt a strategy to reinvest the dividends and make constant contributions so that one day, in the future, we can reap the benefits.
Expectations versus Reality
In addition to discipline and patience, those who intend to build wealth and income through the Stock Exchange also need to know how the world of investments works.
At this stage, many, instead of studying, prefer to follow the news in the media, that famous analyst and even tips from friends and relatives. But it is important to be careful because one of the main reasons why many give up or even go bankrupt is the lack of knowledge about how the Stock Exchange works.
If we were to gather all the mistaken beliefs about what is expected of the Stock Exchange, it would almost fill a book. But I would like to point out here the main expectations that people commonly have regarding stock market investments, and the reality behind each one:
“It is possible to get rich by day trading.”
False. The fact is that day trading is a job and, as such, the income that can be obtained from it is an active income. This means that you will only have an income while practicing the activity. Try going a year without trading and you will see your source of income cease.
Furthermore, this is extremely difficult, exhausting and stressful work. You need to be in excellent health to withstand years of intense stress and, from time to time, return part of the money you manage to extract from the market. Therefore, we can say that day trading only works for people who work exclusively with this, who have a lot of capital and who already have extensive experience in the variable income market.
“The stock market is like a casino: the big banks win, and they take all the money from small investors.”
This is a lie. The market is quite democratic and, above all, meritocratic. If you know what you are doing, it is unlikely that you will leave the stock market with a loss in the long term.
Stocks are parts of companies and a company is created to make a profit and grow. And you, as a partner, will participate in this growth and receive part of the profits.
What makes you lose money on the stock market is getting scared by any drop, selling your shares for fear that they will fall further and thus making a loss. The biggest enemy of small investors in the stock market is themselves when they don't know what they're doing, are unaware of the dynamics of the stock market and don't have the patience to invest for more than a decade and be able to reap good results.