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As we all know we are in a bull market which I assume has just started and has a long way to go. I want us all to make the most of it and in order to do so, here are some common Bull Market Mistakes that we should avoid.
F&O Trading Is The Way To Be Rich.
Only 1% of the F&O traders out of the 100% make money and the interesting part is the 1% makes what the remaining 99% has lost. F&O is a Zero-Sum Game. So the saying of “F&O trading making you rich” is a Myth. Also, the 1% who make money are mostly the F&O writers, not the buyers. just like an insurance company which receives a premium from 100 and has to cover hardly 3-4. Out of them considering the probability making it a Win-Win situation for the company majority of the time.
IPOS Make Good Money, Let Me Sell Something And Invest into IPOs
This is another myth that says IPOs are underpriced or are offered at a fair value. No one likes to sell their product at a cheaper price!! why will the promoters? You will observe maximum IPOs offered in bull markets because everyone wants to sell their product in good times. More than 60% IPOs are at a lower price than their listing even after a decade. The great veteran investor Parag Parikh has said that it is safe to assume that IPOs are not good bets, in reality.
To understand why IPOs are a bad bet in detail. Read My Blog: https://strategicalpha.blog https://strategicalpha.blog/2020/11/05/why-not-to-invest-in-ipo/
Investing In Envy, When Your Friend Has Made More Money Than You.
Investing in envy is totally against the rule of investing. It affects you psychologically and impacts your decision-making. It is biased to make profits. Investing is more than 70% psychology. Investing in a fundamentally sound business that you are aware of. Businesses that are available at a deep value and in which you expect good demand is an example of investing.
Every time I Sell A Stock, It Makes A New High, Let Me Buy Again.
Stock selling should be done only when the fundamental story of a business has changed. Or if there is technical weakness on the charts i.e lack of demand for it. Because sometimes we may not be aware of any issues going on with the business of the company but Price Action discounts Everything. That is why charts with long time frames should be closely followed. In the short term, it’s all about the sentiments of bulls and bears but in the long term, it’s all about the value in a business.
Let Me Sell My Mutual Funds, I Can Make More Money by Investing Myself (During Bull Markets Everyone Becomes An Expert)
During a bull market run every Tom, Dick, and Harry will start going up. which will bring out the expert of every retail investor and they will start investing by themselves. But at the end of the run, businesses with sound fundamentals will only last. You should only invest by yourself if you have a good understanding of the business. Invest if you are aware of the various nitty-gritty of investing, or else mutual funds are the safest option for an investor.
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Very important note: The objective of this blog is to share knowledge and info about multi-bagger ideas/opportunities. Neither is this trading website nor an analyst website nor a Buy/Sell call website. For stock market success, always do your homework, own analysis, and make your own decisions.
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