Why you never bought a stock? A Few Common Reasons

Why you never bought a stock: It’s a known fact that less than 2% population of India invests in the share market. After the coming of PM Modi into the government, even though the stock market is bullish; however it hasn’t been able to attract more people to invest.

If we consider just the percentage of the population in India which invest in the share market, it’s the same as that in the 1990s. There has been a number of changes in the last 10 years. Smartphones, high-speed internet, social networking, connectivity, etc all have seen a boom in their industry.

If we just compare the scenario of India 5 years back, we can notice how watching youtube on your phone internet pack was a rare scene, even for the working-class people. However, after coming to Reliance Jio, we can find even a 3-year-old watching ‘Doraemon’ on his/her phone.

Image source:  Milan Nayak

Things are changing too fast with time. However, the investing world is still missing the boom. People who should start investing by their first salary, wait until their 30s to even invest their first penny.

If you are not investing, then you are missing out. The upcoming world belongs to the fast-mover. When you are busy deciding whether to invest or not, at the same time many have earned lakhs from their investments.

But why people do not invest in the share market? Are they really unaware of the power of investing or are they still afraid? What’s stopping them from creating huge wealth?

Definitely, it cannot be the 4% annual return on the savings. Do you really want to keep Rs 1 lakhs in your saving accounts for one complete year, just to get Rs 4,000 in returns? Moreover, if you are in your 20’s and belong to a working-class, then what’s really stopping you? Why have you never bought a stock?

It definitely can’t be a fear. No one in his/her’s 20s fears spending money. If you can buy a Nike shoe for Rs 8,000, and spend Rs 2,000 every weekend on drinks, then certainly investing Rs 1,000 per month on stocks won’t scare you.

Further, accessibility can’t be a reason why you are not investing. The people who are currently in their 20’s are an expert in using the internet on all platforms- no matter its phones, tablet, or laptops.

Or are you afraid of opening a ‘Trading and Demat account’? A generation who has credit cards, debit cards, 3 savings accounts, a passport, Aadhar card, pan card, driving license, voter id, etc just can’t say that they are afraid of doing little paperwork to open a new trading account.

Also read: 3 Amazing Books to Read for a Successful Investing Mindset.

Then, why do you never buy a stock?

While finding the answer to this question, I met over 300 people. Most of the people whom I asked this question were in their 20’s or 30’s.

Here are a few common reasons that I found out about the people who never own a stock.

Why have you never bought a stock?

You do not understand the stock market and it’s like ‘Chinese’ to you 

The most common answer that I got to my question. ‘I don’t understand why stock price changes’.

When I asked my next question that did you search the same on youtube, most of them said ‘no’. For a generation, who spends over an hour daily on youtube, searching for something that they do not understand should not be uncommon.

However, most of you will never search for it. Although the answer to ‘why you never bought a stock is ‘I do not understand it, however, the root answer for this is different. It’s unwillingness.

You do not want to start small 

You never bought a stock because you want big profits. Why invest Rs 10,000 in the market, if even a 20% return will make only Rs 2,000 in a year? You want to make millions from the market, and according to you ‘I need huge money to make money, If only I have Rs 10 lakhs to invest…’.

You will only invest in the market when you will have lakhs of rupees or maybe more. Nevertheless, you ignored the fact that every successful investor once started small.

Waiting too long for the perfect time

‘Oh, the market is quite high currently, I cannot invest in the share market now’.

‘Nah, the market is falling. I won’t invest in the share market in these bad times.’

This category of people is always waiting for the perfect time to invest and try to time the market. However, their emotions are taking control of them.

When the market is high, they think that they will buy the stock when it’s lower. When the market is low, they argue that they cannot make money in this falling market. Hence, they never buy any shares.

Also read: 75x Returns by Sensex in last 30 Years of Performance.

You do not want to move your lazy a** and prefer others to manage your finances

You are one of those people who are just too lazy to buy stocks on their own. Moreover, you believe in lending money to your friends, siblings, or financial advisors so that they can invest in your place.

But while doing so, you forget that you never bought any stock. It was your friend/sibling/financial advisor who bought it. You never learned how to invest and even after earning a good salary, you are financially literate.

Afraid it’s going to be 2008 all over again 

Image source: The river seers

The market is too high, there might be a 2008-09 market crash again. This category of people relates every market movement with the 2008 economic crash.

A few of the common questions of these people are- ‘When will be the next crash in the market?’ ‘What if the market crashes tomorrow?’, ‘What if it’s even worse than the 2008-09 economic scenario?’. This category of people is too afraid to invest and always considers the worst that could happen. The fear of the past stops them from buying their first stock for the future.

You consider it gambling or a scam: 

As you never understood the stock market, you consider it gambling or a scam.

‘How can that stock give 5 times returns in 2 years? That’s impossible. It’s just gambling’. Whenever you hear your friends making money from the market, you just consider them lucky.

You think that your friends have got good luck but you are not that lucky. The image of stock market investing as gambling/scams stops you from buying your first stock.

You are a pessimist and only notice people who lose money in the market:

This category of people only notices how his friend lost money in the market and how much he lost. They are confident that no one can make money from the market until they are gifted lucky.

When they are busy loathing the people who lost money in the market, they do not notice that there are many who made tons of money from the same share market.

Besides, there might be multiple other reasons why you never bought a stock, however, these are the ones that I found common and repetitive.

Please learn lessons from this post and start your financial journey today.

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Further, if you are one of those who never invested, then comment below on why you never bought a stock?