Share Market Myths

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Information about Share Market Myths

Published on February 10, 2014

Author: KotakSecurities



If you are someone who is starting out in the share market, beware of the advice you take and don’t believe everything you hear.
Checkout our presentation to know some popular myths about investing in the share market.

Share Market Myths

Share Market: Dealing with the devil? • The share market and all things associated with it are often seen by many people as something bearing a huge hidden risk. That’s really not the case. • Yes, there is risk, but quite frankly, dealing in the market doesn’t mean you’re dealing with the devil. • Here’s a list of 10 myths about the share market.

Myth #1: Stocks = Risk! • That’s not true. The main function of stock investment is wealth creation. Investing in stocks sensibly over a long period helps create wealth for the investor. The key to investing in the share market is discipline. Learn to build a portfolio that offers you steady growth and diversify your holdings. Any investment carries with itself an element of risk.

Myth #2: No Broker = No Profit • The reality is that the working of a stock market is not the simplest thing to understand. Hence, if a person takes some time out to actually understand and gets to know the manner in which the market works, he would naturally stand to make some gains out of it. You do however need to invest some time in it and with experience; you’ll become a great investor.

Myth #3: Buying Stocks = Gambling • One of the oldest and widely circulated myths about the market is that venturing in is nothing more than gambling. The biggest function of equity market is wealth creation whereas no wealth is created in gambling.

Myth #4: No Market for Old Men • Age has nothing to do with your competence in the stock market. Regardless of your age, you should pick healthy, growth-oriented companies to ensure a profitable portfolio.

Myth #5: You don’t need to know a lot • If you want to succeed in the market, you need to know everything there is to know about the stocks you’re investing in. Warren Buffet endorses the fact that you should know everything about your stocks and the sector. If you hire a good investment advisor, he will always be on top of the knowledge game and offer valuable advice.

Myth #6: Always buy when stock price is low • This is not true all the time. Please don’t assume that stocks which are down will rise again. There are no guarantees of the same.

Myth #7: Always sell when stock is rising • As with the previous point, this is again not true all the time. If stocks are rising, the outlook may be promising for the company and it may move on to bigger things. Thus, it may not be the best time to sell the stock.

Myth #8: Fallen stocks will rise again • This is an area where many investments falter. This is not true at all. There are a host of reasons as to why stocks lose their value. Intrinsic, as well as extrinsic factors are responsible for the fall and as a result, there is no guarantee that fallen stocks will pick up pace and rise in value.

Myth #9: Stocks that have rallied will fall • If a business is doing fine, there’s no reason why its stocks should tumble on day. There might be some movement on a daily basis but that’s merely an indication of certain relevant factors in the market.

Myth #10: Market forecast should be precise • Even Nostradamus couldn’t predict the fortunes that lie in the stock market; Case in point - SENSEX. While certain things can be deduced, the market is not an exact science. As an investor, patience is the key – long-term plan has been seen to create more wealth over short-term gains.

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Disclaimer: Kotak Securities Limited, Registered Address: 27 BKC, C 27, G Block, Bandra Kurla Complex, Bandra (E) Mumbai 400 051. Correspondence Address: 6th Floor, Kotak Infinity, Building No. 21, Infinity Park, Off Western Express Highway, General AK Vaidya Marg, Malad (East), Mumbai 400097. Tel no: 66056825. SEBI Registration Numbers: NSE INB/INF/INE 230808130, BSE INB 010808153 / INF 011133230, OTC INB 200808136, MCX-SX INE 260808130/ INB 260808135/INF 260808135 , NSDL IN-DPNSDL-23-97, CDSL IN-DP-CDSL-158-2001, AMFI ARN 0164. Compliance Officer - Mr. Sandeep Chordia. Tel. No: 022 6605 6825. Email id: In case you require any clarification or have any concern, kindly write to us at below email ids: • For Trading Account related queries: • For Demat Account related queries: • • Alternatively, you may feel free to contact our customer service desk at our toll free numbers 18002099191 or 1800222299. You may also call at 30305757 by using your city STD code as a prefix. In case you wish to escalate your concern / query, please write to us at and if you feel you are still unheard, write to our customer service HOD at

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