The stock market has come out of a 3 months long correction and heading upwards again. Mid-cap and small-cap stocks are flying high. The temptation must be strong for first-timers to enter the market and become rich quickly.
Whenever anything looks tempting and really good there is a psychological urge to indulge. Doesn’t matter if it is a lunch buffet at a popular restaurant or an electronics sale from an online e-tailer or a fast-rising stock market.
The sensible thing to do would be to take a deep breath and step back. An irrepressible urge to do something is often followed by deep regret – specially when the only thing in your possession is an entry in your demat account that is sharply losing its value.
An oft-quoted statistic is that 90% of traders fail to make money in the stock market. The same statistic probably applies to most first-time investors as well.
The reason is simple. A recent article in investopedia.com not only explains the reason, but charts out the steps required for success in the stock market.