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Top 10 Stock Market Myths Busted- Do Not Be Fooled


There is no denying that we all are a lot more scared while investing for the first time in the stock market. We come across several thoughts that do not let us move ahead. Besides, numerous stock market myths act as a catalyst to our fear of investing and trading. Still, India has been a country where people are pretty good at breaking barriers, taking risks, and doing the impossible. 

If we take a look at numbers, India constitutes approximately 18 million investors in the equity market. However, comparing it with the country's entire population, the number of investors appears pretty small. So, the question arises- why most Indians don't invest in the stock market. There's a simple answer to this; it's because the majority population don't have the required knowledge of the share market and its working. 

Rather than giving it a try, we believe in what others have to say about it. But we say, forget everything! Listen to what we have to say. We invest, we have experiences in investing and trading, and hence, we know how the stock market works. Therefore, in this blog, we will debunk the stock market myths that are completely useless and baseless. 

The Most Common Stock Market Myths That Hold You Back from Investing

Here, we tried busting some common myths and misconceptions that keep potential investors away from the stock market. As a result, they lose out on the opportunity for their finances. So, without any further ado, let's discover the myths and the actual truth.

#1 Myth: Investing in Stocks is Identical to Gambling

Well, this is the foremost and biggest myth to which people often fall prey. People believe that investing in a stock is gambling because they have a little or absolutely no knowledge about the subject matter.

However, if you observe closely, you will find that gambling is all about luck. Either you will win or be fully in the pit. On the other hand, the stock market is an entirely different thing which depends on several factors. It constitutes the market history and the current economic condition of the company/stock. 

Besides, you also look for how the company will perform in the future. In short, you go through a complete company/stock analysis before you put money in the company/stock. If your calculations and all the analysis are right, you can create a hell lot of money. Your money will keep drawing to you even while you are asleep, travelling, on vacation, etc.


Hence, the first stock market myth is entirely false. It's not gambling. All you need to do is to examine your company thoroughly before buying it. If you don't know how to analyse a company, check out our blog on Fundamental Analysis of the Stock.

#2 Myth: You Must Invest a Lot of Money to Make Money in the Stock Market

It's one of the biggest myths that highly discourages investors from investing in the share market. You might not be aware, but the stock market receives millions on trading every day. However, this doesn't imply that you must put an excessive amount of money to start investing in the market. 

It may sound surprising, but you can kick-start investing in the stock market with as little as Rs. 100. In 1986, Rakesh Jhunjhunwala- one of the greatest Indian investors bought 5000 shares of Tata Tea at Rs. 43. Within three months, the stock price rose to Rs. 143 and he made over three-times profit. Could you believe that he earned 20-25 lakh in three years? 

Hence, another stock market myth debunked. You can begin with as low as Rs. 100. In case you are wondering where you can learn the concept of the stock market, check out our easy to understand the Stock Market Course for Beginners

#3 Myth: Beating the Market is Impossible

Undoubtedly, a few people or investors love saying that beating the market is impossible. So, you better don't even think of trying.


Let me draw your attention here! There lies a big difference between impossible and challenging. A stock market is unquestionably a challenging place, and hence, beating the market is quite strenuous.

It requires a lot of patience, discipline, and extensive research. But it's not impossible. With the right investing strategies, you can beat the share market like a pro. 

If you keep yourself in touch with the stock market stuff, then you might have heard about value investing. It's a good instance, and over time, a well-executed value investing strategy stands a great chance of beating the market. 

If you want to enlighten yourself with the value investing concept, don't forget to explore our Value Investing Course

#4 Myth: You Always Need a Broker to Invest

It's a big no! Before we proceed, question yourself- do you have a sound understanding of the stock market? Do you have the time to track the market movements? 

If your answer to the questions is yes, then Cheers; you don't need any broker. In case your response is no, you still don't need to worry at all. 

FinnovationZ offers Complete Stock Market Training Course that let you master the complete fundamentals of the subject matter. 

Once you have completed the course, you need to open a Demat and trading account. Open a free trading and Demat account on Upstox with us. 

#5 Myth: Stock Market is All About Losses

There's no denying that stock markets are volatile and quite risky. Nevertheless, only those suffer losses who don't have their basics right or people who panic and lack patience. Many investors exit investments following short-term volatility instead of looking for long-term benefits. 

To make profits, you require patience and a profound understanding of the market dynamics. Furthermore, it's significant to avoid following the crowd. 


Also, you can't time the market so you must avoid doing so. Hence, it's obligatory to remain invested for the long term. If required, you must not hesitate to seek a professional's help.  

#6 Myth: Stocks That Have Risen Will Eventually Come Down

It's another biggest common myth of the stock market. Just because a company holds excellent fundamentals, it is not essential that its stock price will come down in case it is trading at a higher stock price. 

Therefore, you must research deeply about the stock before buying it. You should keep a proper track of its management and ensure that it is working well. Besides, we recommend not to make any decisions based on short-term returns. One must always look for long-term investments as prices keep fluctuating.  

#7 Myth: High Risks Equates High Returns in the Stock Market

Advertently speaking, this statement is not entirely false. We agree that various high-risk investments in the stock market do prove favourable to some traders. However, it doesn't imply that every high-risk investment will yield high returns every time. 

If this statement, the cause and effect relationship were correct; every investor in the stock market would only be trading in high-risk investments. The truth is that high-risk investment carries an equal opportunity of losing big as of winning big in the market. 

Again, you require patience, caution, and research to encounter a high-risk investment that can yield you higher returns. Do not forget that many biggies of the industry created wealth by investing in several small, low risk-investments that paid off in the long haul.  

#8 Myth: Buy Stocks That Are in the News

Just because something is trending hot and is in the stock market news, it doesn't guarantee excellent returns. It is not always considered a correct investment strategy. 


Often, hot stocks with multiple buzzes are overvalued as everyone is trying hands to buy their shares. We don't say that it's a bad idea to go with the news. But buying something solely because that thing is trending is not a wise choice. 

Get ideas from the news, conduct research on that particular company, proceed to buy that stock if it's worth. In case you want to learn analysing the company's management, its fundamentals, etc. you must read our Guide to Fundamental Analysis of the Stock

#9 Myth: Trust Your Instinct While Investing

The statement stands true in various aspects of our lives. But here we are talking about the stock market. Here the instincts don't work but the right investing strategies. To be in the stock market and playing the game well, your analytical skills should be stronger. 


Therefore, instead of going for instinct; try to follow and create the right strategy. As we said, it is not gambling. It's a whole different story, and the writer is you. The writer plays with words while you need to play with your analysing skills. 

#10 Myth: Your Money is Always Safe in the Hands of an Investing Pro

We have already mentioned that the stock market is quite volatile and full of uncertainty. If you have hired an investment advisor or you are following investment letter, don't assume that they will bring money for you for sure. 

Stock market investing is a pretty uncertain game, especially when you are playing it in the short-term. Not every professional can provide you with assured returns. On the other hand, these professionals or advisors may eat away the profits you have earned. 

Therefore, it is advisable to use your best judgement as you would with any doctor, mechanic, restaurant, plumber, accountant, etc. If the professional seems credible, then exercise caution. 

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