Why do most people fail in stocks investment? 4 simple reasons

There are hundreds of reasons for why people fail in stocks investment, and there is never any lack of discussion. What I want to write is some of the simplest reasons, and what I want to say is in plain English, and I don’t want to beat around the bush.

I understand that most people despise what I say below (for reasons I have listed here for the opponents: because it’s too common, it’s not new, I don’t agree with it, I don’t accept it, I’ve heard it a thousand times), but I want to emphasize that if these problems are not solved in the bottom of your heart, it will be difficult to make a lot of money in stocks investment. The most important truth does not have to be profound and difficult to understand, and the simple is the truth.

Table of Contents

Lazy

For a long time, I personally thought it was number one on the charts. Most people are unwilling to work hard, lazy and do not want to spend time, and do not want to devote an equal amount of effort to their own success. People only see the glamorous appearance of investing successfully and making a lot of money. Just want to reap without sowing, look for shortcuts, seek out the touted stocks, pay and jump on the stock train that investment consultant marketed, books or journals that do not directly list the touted stocks will be thrown aside.

Chase the investment-stars, short-term riches myths and stories deliberately shaped by the media, like teens chase a pop star every day. Never think about whether these stories are fundamentally reasonable? Is it logical? Does it conform to common sense? Is it true? Fact-based? ? Is it feasible? Is it sustainable? Is it suitable for ordinary people to use? Does it really help you?

The principle of investing and running a business is the same, and it is not even different from going to work. Office workers can leave their work aside after work, but have you seen that investment guru who is respected by the world did not spend all his life and devote all his time?

The vast majority of investors who participate in the stock market (at least the ones I know) think all day long that it is best to buy a stock that they have never heard before, and retire immediately after rising 10,000 times tomorrow. Don’t want to understand what business the company operate, don’t want to figure out how the company make money or lose money, even don’t want to know why the share price is rising, just want to know the ticker.

The phrase “diligence can make up for one’s clumsiness” is valid in stock investment, because the bar for stock investment is very low, and almost everyone is qualified; as long as you have long-term commitment and perseverance, it is possible to invest in stocks successfully. As long as you have an average level of intelligence and put in the effort. Investing in stocks has nothing to do with IQ. What’s more, most people in this world just think they are smart people. In fact, there are not so many so-called high-IQ people in this world.

Make excuse

The easiest thing in the world is to find excuse for failure, to find excuses for unwillingness. But successful people are all the same kind of people, and there will be no excuses. The number one thing I hear most often about not being able to make a lot of money in stock investing is “I have to go to work, I don’t have that much time.”

In fact, this is a plausible pretext, but you spend hours every day watching junk TV programs, swiping Facebook to care about friends’ gossip, a bunch of unnecessary parties but taking up all of your daily life; even don’t want to know if the stocks you bought have been losing money or making money, let alone tracking the stock market dynamics or understanding the prospects of the main business of the company you’re buying.

“Sour grapes mentality; you can’t eat grapes and say grapes are sour”, self-righteousness, ignorantly denying successful people, and the evil side of human nature out of jealousy are all excuses. Otherwise, why are there often “many people” (please note that not a few people) who are unwilling to admit Buffett’s extraordinary achievements in investing? All kinds of strange doubts about him, when he performed well, he was named a stock god, and when the annual remuneration occasionally fell behind the market, he was thrown into trouble (Berkshire Hathaway share performance was negative 32.35% in 2008, negative remuneration for three consecutive years since 2000, and negative 20% from 2022 to the present).

For decades, the mainstream media have sarcastic criticism on him in bear market or market crash. All these can only prove how ignorant the majority of people in the world are. As for the haters or investment losers, it is even more common to see infinite hostile aggression on Buffett. These comments just show the ignorance and arrogance of the majority of investors in the market, and in fact never damage Buffett’s position in the stock market. I myself often try to figure out if people’s mindsets and underlying beliefs about investing are correct by asking “what do you think about Buffett’s investment achievements.” The question is simple, but the answer is important.

When made a little money by investing in stocks, and shouted loudly, as if afraid that people in the world would not know how wise he or she is. When lose money, start blaming everything, bad luck, media, internet celebrities, investment advisors, securities dealers, the books read, the falling market, and the company managers; but never examine how arrogant and ignorant he or she is.

Unwilling to change

Investment is not a science, and there can be no formula. This has been the consensus of hundreds of years of history and countless respected investment gurus—successful investment gurus are almost always fundamental researchers. But such countless successful experiences and facts still cannot change many people to return to the right track of investing in the stock market and study the operating data of investment companies. Just because this way is too boring, tedious, too stupid, not creative, no body want to do down-to-earth works, unwilling to get rich slowly.

Most people still do not believe in evil, history, experience, and the success laws of countless people; they believe that they will find the blessing of the god of luck, and believe that they can find mathematical formulas or martial arts secrets that have never been discovered before.

Obessess to look at technical graphics, do band trading, time the market; or buy various derivative financial products, maximum leverage, ignoring various potential risks that are greater than the probability of success in the gambling. People even believes he or she can be like a very small number of Wall Street financial giants, through mathematical calculations and quantitative models, can turn a stone into gold and find the password to get rich.

Modern people are almost all dual-income families. Most people go to work to pay their unfinished monthly bills, car loans, mortgages, and insurance premiums. In addition to satisfying personal face problems and maintaining the so-called living standard, many people actually live from paycheck to paycheck. Therefore, modern people are all thinking about how to income the income, hoping to use stock investment to develop income other than work and main business, so as to reduce their pressure.

But there is actually a big problem with this lifestyle that modern office workers follow. Few people take the time to examine what is really necessary each month? Are these bills necessary? “Necessary” and “need” are two different things. I admit that it is easier to say than to do. Everyone has heard of this principle, but have you tried to review it?

If you can’t tell the difference between the two, there is a high probability that you will live from paycheck to paycheck when you retire. The difference in the middle is that the car you drive when you retire is changed from a domestic car to an imported car. After you retire, you get a place to stay after you pay off your mortgage. The money is earned by the bank.

The best years of your life are contributed to the company, but you can only make ends meet by mediocre monthly salary. It is impossible to have extra money and time to make your dreams come true. You have worked hard all your life, you will always be a slave to the bill, and you will live by looking at other people’s faces.

Under this current mainstream comparison and mainstream thinking mode of office workers, it is impossible for you to have funds and time to start a business, invest, or do what you are passionate about (because you don’t want). Unwilling to change the focus and mode of life, of course there is no time to allocate to stocks.

If you are willing to be an office worker or a moonlighter all your life, then it is another matter. But all I see are people who adhere to this set of mainstream values, and then feel dissatisfied all day long, don’t want to work, complain that they don’t have the funds to invest, but are unwilling to change their lifestyle and values, who can complain?

Impatient

Buffett said: “Successful Investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time.”

Buffett ever said “No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.“

All investments, not just stocks, including real estate, gold, foreign exchange, and antiques take time. But most people just want to get rich overnight, people don’t want to wait, they don’t want to let their assets ferment, they just want to get an Aladdin lamp in Arabic mythology as soon as possible.

Even if you’re really busy at work and only have time to care about your portfolio on holidays or occasionally; consider ETFs tracking the broader market. As long as you make up your mind, don’t follow the trend or buy a bunch of ETFs not tracking the broader market that even the wealth management specialists themselves don’t understand.

Or somebody may suggest you buy the stock mutual funds. Howver, the fees are surprisingly high, and the long-term returns have proved that most of them are inferior to the performance of the stock market. With ETFs tracking the broader market, you just need to buy, and don’t sell under any circumstances; you can still earn decent returns from the stock market in the long run.

The vast majority of investors swear to follow long-term investments in a bull market or making money, believing that time compounding makes sense; but immediately sell out positions and become a spectator in bear market or market crash. Moreover, people think they are fortunate that they sell fast, they have foresight, and they are really genius, avoid the falling knives,

However, people forget the so-called long-term investment or Buffett wrote in his 2004 shareholder letter: “Be fearful when others are greedy, and be greedy when others are fearful”. People think that they are really wise. They can wait until the market rebounds, and it will be safer to re-buy higher-priced stock prices and chase higher stock prices with no margin of safety.

But a very small number of really smart investors will enter the market at such a time, and they will not bother to bend over to pick up the bargins that have fallen to a reasonable price level; because the share price of these targets that they have observed for a long time in the bull market is simply hyped up by the market.

Most people who invest in stocks are reluctant to make long-term investments, and they still have the misconception that the stock market is a place to make quick money. It’s deadly to look only at the short-term benefits of a few months or even a few days in front of you–and that’s the root cause most people don’t make a lot of money from the stock market.

Closing words

The stock market is more complicated than most people expected (please keep this sentence for a lifetime), and not everyone is suitable for investing in stocks , getting rich and making a lot of money. Whether the investment is successful or not, we must remain humble. Self-righteous, play petty tricks, and complaining all day will doom to fail. Investment success has nothing to do with high IQ, but it is definitely highly positively related to temperament. If you want to succeed in the stock market, you need to at least work hard like most of the 9-to-5 workers in the world; this may not necessarily make you rich from the stock market, but it will make money.

Finally, ask yourself: Have you ever spent at least 8 hours a day researching the stock market and the stocks you bought like you would at work? If not, do you think it’s reasonable to make more money from the stock market than you work for?

The initial expectations were wrong, and the results were unlikely to be satisfactory.

Disclaimer

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