4 Reasons You Haven’t Invested in The Stock Market Yet

Although the stock market proved to be very profitable for people who know their way around stocks trading, less than half of American adult population invests money in this industry. According to a study conducted by Bankrate, only 48% of American trade in the stock market. Why do you think this is happening?

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What do surveys say?

Bankrate performed a survey asking Americans why they avoid the stock market. 53% of responders said they don’t have the necessary money to go down this road. 21% argue their choice through their lack of knowledge in the field and 9% think that stockbrokers are not trustworthy.

An even smaller number, 7% have the impression that it is risky to trade stocks. The remaining responders didn’t know why they stay out of it or they had completely different reasons, while 1% simply refused to answer. Now, let’s take each of the 4 reasons and discuss them in more depth.

Not having enough money

Considering that there are plenty of Americans who live from paycheck to paycheck, there is no surprise there are so many people who think this. The majority of responders who gave this answer had an income lower than $30,000 per year.

The problem is that if you don’t think beyond the present day, you will have a hard time during old age. Social security payment doesn’t even cover basic expenses, so it’s time to save some money for worse times by investing a small amount now.

Try this: put aside a small percentage of your monthly salary for 12 months. This should be enough to open an investment account and get started with stocks to secure your future life.

Not knowing how to do it

This is the worst excuse you can find. We no longer live in the 50’s when information was hard to come across. Thanks to this awesome thing that we call the internet, you can learn everything you need to know without spending a dime.

There are sites with very useful tutorials and thousands of online books you can read on this topic. Moreover, you can connect with traders for insights and tricks. Online trading forums are extremely valuable sources of information.

There are too many risks

Trading stocks is not exact science, there is a lot of uncertainty in this market but thorough research, intuition and a bit of luck will bring you success. Do you think that people who invested in Google at the beginning knew it was going to be such a huge success? No, but they are now millionaires because they took a chance. It’s true you can lose it all with a very bad deal, but you can’t win without playing.

Not trusting stockbrokers

There are plenty of scams and you must be very careful about what you put your money into but it is definitely worth the effort. Stockbrokers’ main purpose is to make profit, just like you do, so you may understand that all tactics will be put to use. Therefore, you must make sure you pull more toward meeting your own goal and less toward the broker’s goal.

There are several types of brokers. The main distinction is made between regular brokers who deal directly with clients, and broker-resellers who connect the client with a larger broker. Another way to categorize brokers is by full-service or discount.

Full-service brokers are more expensive and they may not be suitable for young people with little money. Before making a choice, you may want to ask for free advice online or to talk with a stock trader that you trust.

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