Myths about investing in the stock market is far from reality – the expert

Мифы об инвестициях на фондовом рынке далеки от реальности - эксперт

According to Gallup’s research, in 2019, almost 55% of the US population owned shares. Western stock markets there are long – therefore, a significant portion of the population of America and Western Europe are involved in the world of trading. Ukrainians, when thinking about investing their own funds, traditionally think about Bank deposits, because in our country there are still a number of preconceptions regarding investment in securities. About this in the article “Myths about investing in the stock market,” said analyst of “freedom Finance Ukraine” Denis White.

“Stocks and exchange solely for the rich” is a common myth that is untrue. To start investing you do not need to have a lot of money – one share of the company can be purchased, for example, for 100 us dollars, and bonds of internal state loan for 1150 USD. Government bond denominated in the currency more expensive – $ 1,150. So, to become the owner of securities, is sufficient to save from 24 to 30 thousand UAH of available funds and to go to the Bank or licensed Finance investment company – said the expert.

Ukrainians still consider the stock a risky tool for investment, even though the facts say otherwise. The historical dynamics of the index S&P 500 (includes 500 of the most expensive companies in the USA) shows that over the past 20 years the us stock market was growing, despite the crisis of 2007-2008. He is in a state of steady growth (with periodic corrections in the form of a crisis) since the great depression in the United States (1929-1933). If the investor is planning to invest for a period of 10 years, you can reduce the risks of speculative changes in value, acquiring “blue chip” securities is the largest, liquid and reliable brands, explains Denis White.

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Most myths about the securities is a result of the painful formation of the Ukrainian stock market at the initial stage. Indeed, reality is far from ideal – in Ukraine without risk, you can invest only in government securities, the risk is somewhat higher carry of corporate bonds and shares of several issuers. But the investment in the developed US market is the opportunity to see firsthand the ease of investment it is even possible to calculate expected incomes, – the expert explained, “freedom Finance Ukraine”.

In the United States soared stocks

Market stock prices are dependent on public information regarding a specific company. Sometimes there are occasions when the market is too optimistic about the company’s future success and overestimates it. However, after the first failure, the stock price of the brand is adjusted to fair value, and in case of significant failures – even below fair value. The investor’s task – on their own or with the help of a financial adviser to determine overvalued or undervalued some action and make an appropriate investment decision. If the decision will be based on the weighted fundamental evaluation and technical analysis is to invest in securities is completely safe and profitable.

To protect yourself and get the maximum benefit, choose investments with a long-term horizon, – said the analyst of “freedom Finance Ukraine”, Denis White.