What is the job of an investor in stock market?
Most investors start learning about investing only after losing money in the market. In the beginning, most of the people will feel that it is very easy to make money with no knowledge about the market. But once they suffer a huge downturn in their portfolio companies, they regret their decisions of entering the market without sufficient knowledge. But It also doesn’t mean that, if we know all the basics of stock market, we can easily make money in market. When investors are loaded with right knowledge and right temperament, then the financial success becomes achievable. Everyone wants to make money in market but the problem arises when everyone wants to make money very quickly. This mindset of quick money is injurious for long term investors. Having this right mental mindset is the key to investment success.
Stock market is a deep dense forest
Imagine the stock market as a huge dense forest and there are many treasures hidden in the forest. The forest is so dense that, even the sunlight can’t reach the ground. Once we enter the forest, it becomes completely dark. We investors are a treasure hunter in the huge dense forest known as the market. We as a treasure hunter encounter many life threating risks while trying to find the treasure box. For e.g., there are many lions, panthers’ cheetahs, poisonous snakes and many deadly creatures which could harm us. Likewise, in the market, investors also face many risks which are unknown. So, it is very much necessary to carefully navigate into the dense forest of the stock market.
Finding the treasure box
We as the hunters are always seeking for the treasure box in the forest to become rich. Likewise, in the stock market, we all are seeking to find the next multibagger to become wealthy. But there is one serious problem in the forest while looking for the treasure box. The problem is, there are thousands of boxes hidden in the forest and most of them have nothing inside them. Only a few boxes have a true treasure of gold, silver, and jewelry in them. But we may think that we can open every box that we find and if there is no treasure in it we just move on to next box until we find the true treasure box. But there is one big twist in the story, we can open only 5 boxes in the whole journey and once we open the 5 boxes and we couldn’t find any treasure then we are open of the game. So, we should be very careful in opening the box since the number of boxes that we can open is limited.
We have only limited opportunities
Likewise, in the stock market, we have only a limited supply of money. We cannot simply invest our money in all the opportunities and expect to make money. We should be very careful in deploying the money since the money is limited.
Job of an investor
The job of the investor is not to find the next treasure box but rather in avoiding the fake box. The treasure hunter would equip with all the equipment’s before going to the forest. Likewise, investors should have sufficient financial knowledge to navigate through the dense forest of the stock market.
Learning continuously is the only lifeline
As I said earlier, when an investor enters the dense forest of stock market everything looks like darkness but Investor have a small torchlight in their hand. It is through the help of this small torch light we need to move around the forest of the stock market. But sooner or later the battery of the torchlight may come down. The torchlight indicates the knowledge in us about the market. The only way to recharge our knowledge battery is to learn continuously. The moment we stop learning things in the market, the torchlight losses its power and source of light may go and we might be in extreme darkness. Knowledge is the only way to remove the darkness in the market.
Handling uncertainty in market
The dense forest of the stock market may test our patience and emotional stability before giving us the treasure box. We must learn to handle the darkness(uncertainty) in order to navigate successfully in the market. investors must posse right mental attitude to handle uncertainty in the market. Investors must understand that uncertainty is inevitable in the market. So, the only way to deal with uncertainty in the market is to accept it.