Home Investing 20 Secrets The Stock Market Doesn’t Want Investors To Know

20 Secrets The Stock Market Doesn’t Want Investors To Know

Trista June 11, 2021

You see stories about the stock market in the news all the time nowadays. Sometimes, they’re about people who work at home and double or triple what they made at their 9 to 5 job. You may wonder how they did it, and also want to earn a reasonable living as a stock market investor yourself. Maybe you searched countless hours to find the best way, but it just hasn’t worked for you. Many are still searching for the secrets to becoming a stock market investor.

To help you on your journey we compiled the best 20 secrets to get you on the right path. There’s no better time than now for you to stop worrying about your next payday and start focusing on your future. You could even begin to travel the world as a stock market investor. Don’t worry about all those stock market terms that you don’t understand because this article is for the average person who wants to take control of their investments. Get started here.


20. Don’t Focus On The Shortcuts

The first secret that stock market investors don’t share is that there are no shortcuts. Unfortunately, there is no way that you can start investing on Tuesday and find yourself loaded by the weekend. However, this doesn’t mean that there aren’t advantages to pick up a win. It simply means that you need to lay the groundwork for stock market investing and not follow trendy shortcuts you found in a Google search because they’re more likely to lead you down a deserted road.

The reality of these shortcuts is they have been around for decades. They used to be shared in the office, especially on Wall Street. Yet today, thanks to the invention of social media, they’re shared everywhere. However, that doesn’t mean you should believe everything you’re reading. Take a moment to think about it – if these shortcuts always worked so well, why wouldn’t more people be making millions by following them? The real secret to this tip is that instead of following the shortcuts, you want to follow one simple rule: never buy what’s considered a current “great stock.”


19. Buy Low and Sell High (Obviously)

The truth about investing is there are straightforward secrets to follow. Other than never purchasing a “great stock,” you also want to follow the rule of thumb: buy low, sell high. That is a rare part of our financial lives where things feel like they are getting cheaper, and this also feels like it’s a bad thing, but it’s not. Cheap is also pretty good, especially when you plan to pay your bill by becoming a stock market investor.

However, you need to know your limits when it comes to buying cheap. For instance, you might want to buy three shares of one company and then 50 shares of another company. Why? Because the company where you’re looking at three shares doesn’t climb in price like the stock where you’re looking at purchasing 50 shares. Nevertheless, no matter what stock you’re looking at, always keep in mind that your profit comes from selling the stocks at a higher price than you bought it.


18. Risk Management

Risk management. These are two important words when it comes to investing. Furthermore, they are simple terms that are easy to understand. Risk management means you always know that each stock comes with its own risk. More importantly, the trick is to know how much you can handle without letting your emotions control the decisions you make when it comes to buying and selling stocks.

Yes, risk management does focus on math. Nevertheless, it’s a simple, mathematical truth: the money you make in the stock market compounds to create your newfound wealth. It means that a 20% loss will only require a 25% gain to get back to being even in mathematical terms. At the same time, a 50% loss will require a 100% gain so you can get even. With this said, you need to realize that if you find yourself at a 90% loss, you will need about a 900% gain to break even.


17. Keep Your Emotions In Check

You have probably heard about the stock market crash of 1929 that sent the United States and other countries around the world into the Great Depression. One of the main reasons this crash happened on Wall Street is that stock market investors let their emotions control their decisions when it came to selling stocks. You have all seen examples of Wall Street in the movies where you see men in suits either yelling “Sell! Sell! Sell!” or “Buy! Buy! Buy!” as a screen with numbers going up and down stands closeby. This is similar to how Wall Street ran during the 1920s.

During the start of the 1929 crash, investors saw the prices of their stocks going down because more people were selling. To try and gain what small profit they could, they quickly sold their shares. That sent the prices down. As a result, it ended in what is now dubbed ‘Black Thursday’ in the history books. Of course, there were other reasons for the stock market crash, but the story is a good reminder to always think with your head and not with emotions when investing in stocks.


16. Don’t Get Stuck in the Past

Now that we’ve discussed the stock market’s past events, investors must understand another key secret in the investing world, and that is you don’t get stuck in the past. It’s similar to other mistakes you can learn from history; take note of them and then move on with your future. The struggle many stock market investors have is remembering all the losses they’ve carried too much. You can’t let this happen. You need to accept and move on from failure.

Instead of remembering your losses, let them help you to make better decisions in the future. In other words, use forward thinking so you can bring the historical data you analyze from reports into real-time, as this helps you calculate your next moves. That will help you mentally think about the outcome of each action and different situations that can happen with your next move. It will help you prepare for anything because forward thinking will also help you control your emotions, also a previously-discussed secret in the stock market world. For example, you might look into self-talk because this will help you talk through the correct decision you need to make next.


15. Stock Market Investors Need Patience

You’ve probably heard the phrase that “patience is a virtue.” When it comes to being a stock market investor, this is a good rule of thum. The truth is patience can help you in many ways as an investor. First, it can support you in making sure you don’t find yourself making a rash decision because you’re worried about taking a loss instead of a tiny bit of gain. It can help you keep your emotions in check. It means that sometimes if you notice you missed the window for your biggest gain, selling immediately out of panic might hurt you more than it helped you.

Second, it can also make you realize that sometimes you need to take time and let a stock sit for a few days, providing you’re not a day trader. Patience will also help you understand that you need to follow the steps you laid out before purchasing this stock, even if it means sitting on your hands for a couple of minutes until you find the correct moment to sell. In other words, use patience so you don’t click that buy or sell button before you should, which you’ll thank yourself for later.


14. Listen To Your Gut

You’ve heard also heard these words many times. In fact, you might have also talked about your gut instincts before and how they are “usually right.” Well, even though one secret of the stock market is that you don’t let your emotions make your decisions, another secret is to follow your gut instincts regarding buying and selling stocks. Mainly, if you feel that a stock isn’t suitable for you or your gut is telling you that you should pass on this one,” then it is time to pass.

Don’t let your emotions take you back to the decision you made because of your gut. Instead, you want to follow your gut, especially if you find that your instinct is usually right. Simply say that this stock won’t work out and move on to the next one. Don’t doubt yourself, and don’t look back because this is when your emotions will come to the surface, and then you find yourself struggling with a past decision. Remember, there are tons of opportunities in the stock market to make money, so move on from your passes.


13. There Is No Sure Thing

One of the mistakes stock market investors make, especially at the beginning of their career, is thinking the stock market is a sure thing. They might believe that blue-chip stocks are a sure winner when it comes to making the most money. They might also think that they will come out in the black and win big as long as they sell at any point. No matter what you think about the stock market, always remember there is no sure thing. While you might find that Disney or Walmart are great stocks, this doesn’t mean that you won’t find a loss one day.

Always remember that when it comes to individual companies in the stock market, they are inherently riskier. Historically, the best bets are placed in long-term gains for stocks, but this doesn’t mean that something can’t happen to change this. That means that it’s never a sure thing. You want to take everything day by day or even moment by moment if you are a day trader. In fact, when you look at long-term investors that have made billions like Warren Buffet, you’ll find that he’s put his biggest bets on companies out of favor.


12. Always Have A Trading Plan

You might feel that you can simply set up a computer or download an app on your phone and start making money by trading stocks. However, if you make stock marketing investing a career, you’ll realize that you need to have a thorough trading plan before getting near the buy and sell buttons. A trading plan is your written set of rules that you follow at all costs. It doesn’t matter if you feel that you’ll make more of a profit by keeping your trade longer. You always stick to the plan.

One of the main reasons for making this plan goes back to another secret of the stock market – not letting your emotions make decisions for you. Think of it this way – when you create the plan, you don’t have the emotions that you will start to feel when you are trading, which will naturally keep your head level. Furthermore, a plan will help you stay consistent when it comes to buying and selling your stocks. It’s always possible that you will find your idea isn’t the best while you’re trading. In this case, continue to follow the plan and then change it up for the next stock you purchase.


11. Bring Psychology Into Investing

Bringing psychology into your stock market career as an investor doesn’t mean that you need to study everything about psychology. Instead, it means that you need to put yourself into the right mindset to make the best decisions as an investor. To get yourself into the right mood for investing, you need to focus on how you emotionally view investing. For example, it’s easy to look at statistics of investors and think, “If 70% of investors stop working within their first several months, then I don’t have a chance of being successful.”

The key is to find strategies that will set your thoughts in the right direction, so you think positively about your investing career instead of negatively. It might be as easy as taking the first 10 minutes of your day to practice yoga or meditating. You might find that what you need to do is talk positively. You might also find that the best way to get into the right mindset is writing in a gratitude journal about your day and how close you are to reaching your goals.


10. Don’t Focus On Friendly Advice

As a stock market investor, part of your career involves making friends in the market, whether it be on blogs or message boards on websites. You’ll find that thousands of investors have become successful on these sites that are willing to give you friendly advice. While this seems like a goldmine, you need to realize that these are the steps that worked for them and that this advice doesn’t mean it will work for you.

It doesn’t mean that you can’t take some words of advice. You can take it and think it over. You can see if it will work in your trading or investing plan, but always remember that just because you’re thinking about it doesn’t mean you follow it. One of the biggest secrets about being a stock market investor is to follow the best plan for you and not what has worked for someone else, even Warren Buffett. If the advice will work in your career, great. If you find that it’s not the best for you, then just move on.


9. Use An Investment Journal

One of the best secrets for investing is establishing an investment journal. As a stock market investor, you might hold stocks for days, months, or years. You might find that you want to turn to trade after some time instead of just investing. An excellent way to help you make these decisions is to write about your day in your investment journal. That will help you keep track of what you like about investing, what you don’t like, and where you want to improve.

You want to write as much detail as possible so you can turn the pages back, read an entry, and know exactly what you need to do to find more profit the next time. For example, you might write down when you bought a stock and when you decided to sell it. You might also write why you chose to sell and how you made this decision. Furthermore, keeping a journal can help you develop more self-discipline when investing, which will only build your skills.


8. Live Within Your Means

When you start investing, you will find that you start making a little more money than average. Even if you keep your regular 9 to 5 job, you’ll still be able to find a broker to help build on your investments or focus on this process after work and on the weekends. Once you start to understand investing, you will find that your account is growing. It’s natural to begin to feel like you can go on a shopping spree or two, purchase a new car, or even look for a bigger house, but that doesn’t mean you should.

One of the best-hidden secrets of the stock market is making the most out of your investments. You want to focus on investing your profits as much as possible and live within your means. Don’t worry about buying bigger and better. Worry about how you can further save your money and build your profits. Focus on what you can do to build on your wealth so you can retire early, take an annual vacation, or support your children in college. Remember that a high income won’t make you wealthy. Saving the income will make you rich.


7. Don’t Forget About Uncle Sam

You know who Uncle Sam is because you need to make sure you have given him enough money every year. It’s something that you can’t escape unless you can claim an exemption for one reason or another. While it’s not everyone’s favorite topic, one of the biggest mistakes investors make is not remembering to pay Uncle Sam when he comes knocking on their door. Yes, even when you are investing, Uncle Sam will want a part of your annual income. It doesn’t matter if you make a few thousand dollars or more; you need to claim your earnings.

You need to focus on making sure that you put aside enough money for Uncle Sam. If not, you could struggle when it comes to paying your taxes. That can cause you to fall back on your investments because you don’t have enough money to purchase stocks for investing. Think of receiving a return on your stocks like a paycheck; put away 20% to 25% so you can pay in on your taxes. That way, you do not have to worry about falling financially behind. To do this, you can remove a certain percentage of your money and transfer it into a different account for taxes.


6. Reach Out To A Mentor

While you want to get into the investment world by yourself, this doesn’t mean you can or should do everything by yourself. The reality is you won’t know everything about investing right off the bat no matter how much research you do before you hit the “buy” button the first time. Therefore, to get on the road to success, you want to find a mentor to help guide you through the process. Not only can they help you learn about investing, but they can also support you in making the best decisions for you.

The trick is to discover a mentor that is doing what you want to do. That means you need to find someone who has a similar frame of mind. For example, you don’t want to find a day trader to help you learn about long-term investing. You want to get someone who has experience in long-term investing and is willing to put forth the time and effort to help you build your investing skills. Even if the person you’re interested in asking to be your mentor is untouchable, you’ll want to reach out to them anyway. You never know who will be willing to help you until you ask.


5. Focus More On The Quality Of Business

Even if you decide to invest part-time and keep your 9 to 5 job, you still want to treat investing as a job and learn about the quality of the business. In other words, there is more to investing than simply finding the best stocks and then selling them when the time is right. Think of one of the greatest stock investors of our time, Warren Buffet, who is famously quoted saying, “When I buy a stock, I think of it in terms of buying a whole company, just as if I were buying a store down the street.”

Buffett knows the quality of the business by thinking about how he is not just buying a stock but purchasing the whole company associated with that stock. When buying a stock, you want to focus on the quality of business by analyzing such factors as consistency of sales, overall sales, the company’s products, and how the company will manage customer trends. Another crucial factor to look at is how the company compares to other businesses. That will help you analyze the best choice for your investments.


4. Pay Attention The News and Social Media

Let’s go back to a few tips from when you were reading about keeping your emotions in check whil making decisions in the stock market. During this time, you got a history lesson on what emotions can do when involved in the buying and selling stocks process. During the 1929 stock crisis, people only had the news to pay attention to. However, this wasn’t something that the investors and traders did during Black Thursday. Instead, they watched the numbers fall and decided to panic sell, further escalating the crash.

One way to help you keep emotions out of the process and follow the trends of the stock market is to pay attention to the news and social media. It doesn’t mean that you will always follow every piece of knowledge you see on social media, as much of it can be wrong. However, when you notice that a company you are looking at investing in or have invested in negatively made the news, you might want to look at staying away or selling your shares. Negative information can negatively impact the company’s stock while positive news can positively impact the stocks.


3. There’s No Perfect Stock

When dealing with the stock market, one of the main secrets you need to remember is that the word perfect doesn’t exist. You might read about how you need to find the perfect stock for investing. Yet the truth is there is no perfect stock. Every stock will go up and down in price throughout the day. The trick is to look at the historical data and find the best process for the stock. That way you know when it’s time to buy and sell.

At the same time, this can also lead you down the wrong road because you can never tell what the future holds when it comes to the stock market trends. When getting into the investing world, it’s easy to believe you’ll make the best income if you cover all the bases. That isn’t true. Instead, you need to focus on what the trends of the market say and go from there. There is no single number that separates good stocks from bad ones.


2. When A Stick Isn’t Necessarily Cheap

Obviously you want to buy low and sell high. While this is true when the stock market is suitable for this line of thinking, it doesn’t mean that you want to always focus on stocks that are a few dollars and then never look at stocks that are over a certain price. That’s because you might find that the stock that is $200 is better than the stock at $3. It’s not the stock price that you want to look at when making your decision; you want to look at how much profit you will gain once you sell.

One of the best ways to get yourself out of the frame of mind that purchasing stocks at a lower price is better is to think of buying stocks as a shopping trip. For instance, you’re not always going to walk into the store and pick the cheapest item you can only to save money. You’re going to look at the quality of the item. Furthermore, you make sure that it’s the best so you can get more for your buck. There’s always a reason you go to a store and look at different brands of the same item instead of just the price tag alone.


1. Self-Confidence is Key

It doesn’t matter what line of work you’re joining. It’s vital that you have one thing in mind, and that is the thought that you’re good at what you’re doing. This means that you need to have confidence in your ability as an investor. If not, you’re more likely to make the wrong decisions. As a result, you will further decline your belief in your investing skills. If you believe that you don’t have enough self-confidence to start investing, learn about the career. Remember to gain some experience with a mentor. You can also use stimulation that will give you practice in real-time but not use real money.

Even though you might want to start investing in the stock market immediately because you’re tired of your job or you need some money on the side, you need to take your time. Building up your confidence can help you establish the right mindset. Self-confidence can give you the mental and emotional strength to believe in the decisions you make. It will also help you keep your head in the game when you find yourself in a loss. Self-confidence will also help you develop the other secrets of this article to further build your wealth.