10 Reasons You Suck at Stock Market Investing + FREE Financial Book Giveaway!

Gains & Losses Total:   -$339.10   -39.62 % = This  is the result of my adventures in investing thus far.  Originally and naively I believed that I would be able to amass a small fortune in a relatively short amount of time because I consider myself to be a reasonable smart person.  Don't get me wrong I have been successfully maintaining my retirement portfolio (401K and Roth IRA) through Fidelity and consistently beating the market for the past 3 years.  But I really suck at investing in individual stocks.  After boiling it down, here are the 10 reasons why:

1.You use a expensive broker that eats up profits and adds to loses.

Simple problem, simple solution.  Find a cheaper online broker.  Personally I've been using Sharebuilder because of the automatic investing for $4, but to make real time trades it cost $9.95 which can take away from potential profits especially if you are working with a small amount of money like I am.  I will be switching to a new broker soon with cheaper fees.

2.You are impulsive and give way to your emotions

Don't get emotional, easier said than done.  Apparently money triggers the same pleasure centers in our brains that drugs and sex do, no wonder it can be addictive.  One way to conquer you emotions is to make some simple rules to follow for investing - buying and selling - and stick to them.  Rules that I follow: Study the fundamentals, know the trends, find companies that are making money (not in the red).

3.You are not rational when dealing with money (like gambling)

Don't become obsessed with your stocks, constantly checking the ticker is not healthy and will not raise the price (trust me I know).  Again it hard not to daydream and carried away with delusions of grandeur when thinking about the money to be made.  To be more rational make reasonable investing goals, short-term and long term.  If some stocks are not measuring up, cut them off before getting burned.  Also consider taking a profit when the stock is on it's way up (don't be too greedy) versus trying to get out when the stock is plummeting.

4.You are the last to get information

Insider trading is illegal because people who work in the company are in the know.  Newspapers are too late for breaking news, subscribe to some RSS feeds or tweets with news about your stocks check them once a day in the morning, before the opening bell. Keep informed about important news concerning the companies you're invested in and make moves accordingly.

5.You work on Main Street instead of Wall Street

Here's the deal, unless you are always monitoring your stocks and watching the news updates, you could miss some major developments and lose some money.  It's not your job to monitor your stocks all day (consider stop-loss orders instead).  People who work on Wall Street and in investment banks are always collecting information and data and spotting trends, you can not and will not be able to match some of these professionals because you are busy earning a living at your job.  Consider ETF's with a variety of stocks.

6.You don't have enough money to invest in good companies

I started investing with $200.  I opened a Sharebuilder account and have been unsuccessful at turning a profit.  I only have had one trade that I was successful in and it only amounted in $10.  Companies that are great companies usually have a premium price tag Google, Apple, MacDonald's, etc.  most stocks are > $5 or > $10 dollars and it is hard to make any money when you can not afford to buy at least 50 to 100 shares.  This is why you need to consider DRIPs or start with microcaps or wait until you can spare $1,000 or more.  I wanted to build my money from ground up, but I find it difficult to invest this way.

7.You are not the King of the Stock Market like Warren Buffet or George Soros or Tim Sykes

You do not get the same discounts that stock market superstars get.  Buffet got discounted shares of GE that you could not buy at the same price.  You are not very wealthy monetarily speaking, and you are not a master of the stock market game.  These people make investing look easy but it took them years of hard work and mistakes before they started to crack the code and become stock market masters.

8.You are looking to get rich quick

I am guilty of this as are you if you came to this site "How to Make a Million Dollars" you probably have one thing on your mind, how can I get rich the quickest.  Well like anything else it takes time, persistence, and practice to become in the stock market.  Don't jump on the latest hot stocks touted by Jim Cramer or MSNBC - usually these talking heads have some sort of interest in the companies they're talking up.  Remember there are only about 10 to 12 major media moguls who control the information you're receiving and usually

9.You are inexperienced

Practice makes perfect, enough said.

10.You are too cheap to pay for investment advice

Unless you are in business school and studying to be an investment banker, you are going to need some help and ideas about when to put your money.  I will be the first to admit this, I am cheap and I don't want to pay someone to tell me where and what to invest but it may be advantageous to get some advice from a seasoned veteran.  Find someone who does some investing - it doesn't necessarily have to be a stockbroker, it could be a friend or relative, someone you can trust and share ideas.

Do you suck at investing in the stock market?  Are you a champion investor?  Are you guilty of any of the 10?
 FREE Financial Book Giveaway!  I have some financial books and I'll give them away to the first three people who comment on this post with their best stock market investing tip.


  1. I have started and stopped investing several time in the last 20 years. Made a little money. I am getting old and thinking starting again.


  2. John best of luck to you. Thanks for leaving a comment

  3. I have heard the saying before, and I will repeat it again as I have tried and tested it - you're mor elikely to end up poorer than richer buying in on 'insider news' you've heard from mates and the informed. Sometimes some are better than others and indeed there is news... most of the time i notice the stock price has been going up consistently and if you wait too long (usually the case) you end up with a nasty pullback when the news does come out (usually more disappointing than positive), or in some really crap insider tips, no news ever eventuates.

    It's something alot of amateurs are probably guilty of. Avoid it if you can!!

    P.S I would love the finance books, but have no idea how you'd send them anyway?

    P.P.S with the $1,000 you have it does make returns alot harder, your brokerage is going to eat into it. While it's true , people can make a fortune from small amounts, the more you have the more easier it is to cushion brokerage IMHO.

  4. Love #4... I have been doing this with my favorite teams for years. Makes sense to use twitter and RSS feed to keep up to date on the markets.


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