In the stock market, there are 2 kinds of stories. One is about earning big. And the other filled with horror and despair after losing money, after trades going wrong.
Stock markets are symbolic of wealth creation, yet very few understand that it takes time to create wealth after investing in the right business opportunities.
Rahul had started off his stock market journey with a long term approach in mind during the stock market correction phase in November 2018.
He had got everything right including the timing to enter the market and buying value picks trading at discounted prices.
When the markets started recovering in Jan 2019, Rahul could not resist the temptation of booking profits. After all 20% gain that too in 3 months looked quite tempting for him.
Sensex reclaimed 38,000 levels in March 2019 and all the value picks which Rahul sold off earlier touched new highs. But Rahul missed out on them due to the trading mindset which crept in and overlooked his investor approach, the actual mindset with which he had entered the market initially.
The difference between an investor and a gambler
An investor is like an owner of a sports team who has made a solid investment by building a great team. Just like the owner of the sports team who knows the quality of the players, an investor puts his money only on quality stocks that will outperform with time.
On the contrary, a trader is like a gambler who bets on the outcome of a match without understanding the risks involved. Just like a gambler, an investor bets his money on trades based on stock market rage or stock market tips but still consider it as stock market investments.
Another key difference between investing and gambling is time. Gambling is a time specific event while investment can last several years. With gambling, you gain or lose once the game is over.
On the contrary, investing for the long term is generally high rewarding. Apart from appreciation in stock prices, investors also get dividends which is a good source for passive income.
Are stock market heaven only for traders?
The journey of BSE Sensex from 100 in 1979 to 38000 plus levels in 2018 depicts one thing clearly that it is on an upward move. However, this journey has not been an easy one. Sensex has navigated through many peaks and bottoms.
This is what makes it a paradise for investors. But unfortunately only for just a very small percentage of traders.
Stock Market in India are highly volatile in nature but stable over the long term. By investing for a long term, an investor is essentially giving time to the company to grow and realize its true potential.
Stock Market is not definitely not a trader’s paradise, but yes it is indeed a paradise for those who are ready to invest in the right opportunities and wait patiently.
Read more: How Long-term investing helps create life-changing wealth – TOI.