May 21, 2015

Speculators of Stock Market

stock index

While the rule of stock market is very clear, many people tend to deviate from the rule, that is to "buy low and sell high". What tends to happen is to "buy low and sell low". The major assumption why people sell stocks even short is because of the confidence in the stock itself. Some people buy stock without doing a research. That's why when the color of the number turned red and became negative, they also became pesimistic and loose confidence in the company they have invested. This is quite alarming because, when this kind people, who are speculators, populate the stock market - the tendency of stocks is to go down even if the company has good standing. This people will sell their stocks even if they have negative gain, with a thinking that the stocks will further go down and that they would be able to recover their loss by buying back at a lower price. As the speculators buys low, another speculator is speculating that price would fall again, as a result speculator B sells his stock at a negative gain and buys back at lower price. At the end of the day no one gain from buying low; stock price just double dip.

As recommended, investors should do research and buy with confidence. And always remember to "buy low and sell high".

1 comment:

  1. Some people go to stock market just to loose money


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