Jason Gabrieli, CFP and Catherine Allen-Carlozo, CFP discuss why you might be reluctant to invest in the stock market. Throughout the episode, they answer questions about how the stock market works.
Investing in the stock market can sound really intimidating and complicated. However, getting positive returns on your investment is more likely and straightforward than you think.
In fact, when done in the right way building your wealth in the stock market only requires you to do one thing: waiting. Jason and Catherine brief you about this in today’s show.
Tune into this episode to learn:
- Why investing in the stock market is the complete opposite of gambling in a casino.
- Is the stock market rigged against the everyday investor (like you).
- How the stock market works and how you can start becoming a winning investor.
- What makes the stock market go up and down.
[00:30] Episode overview: being discouraged from investing in the stock market
[01:46] 2 main reasons people are afraid to put money in the stock market.
[02:54] You’re probably already invested in the stock market (even if you think you aren’t)
[04:21] How does the stock market work? (in plain english and for complete beginners)
[05:13] What makes the stock market go up and down everyday (for complete beginners)
[05:38] Stock Market Passive Income: Owning part of a business without having to do any work.
[06:00] Here is exactly why investing in the stock market is NOT gambling (statistics).
[08:03] How careful should you be when investing in the stock market?
[09:29] Why do people fall for finance scams all the time?
[10:10] How to take SMART risks in the stock market.
- By being invested in the stock market, you get to own parts of companies that are on the front lines of innovation. You get access to novelty without necessarily needing to be a business owner yourself.
- The stock market tends to go up and down everyday because people have different feelings everyday on how much that share is worth. So, when you have a buyer and a seller with different feelings on how much that share is worth, the price moves. It is basically supply and demand.
- Day trading in the stock market involves gambling. In order to avoid gambling in the stock market, be a long term investor.
- Here is why the stock market is NOT like gambling: Statistically, staying in a casino for longer the less money you will leave with. However, the longer you stay in the stock market the greater the odds of positive returns.
- If you do engage in day trading, make sure not to put in any money that you cannot afford to lose.
- People fall for finance scams all the time because it is human nature to be convinced that someone else has it all figured out. It takes the fear out of an unknown world.
- Higher risks lead to higher returns. However, you have to take calculated risks such as by rebalancing your portfolio and making sure it is a diversified portfolio.
Link to Ben Carlson’s Blog Article (with the mentioned statistics): A Wealth of Common Sense
Connect with Jason Gabrieli: LinkedIn
Connect with Catherine Allen-Carlozo: LinkedIn
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[03:18] “People lose sight of whether they are invested in the stock market, because in your retirement plan at work or maybe if you have an IRA or a roth IRA or even a 529 for your kid or something - most cases you are in some kind of a fund, you might not actually hold the stocks directly so it’s easy to lose sight of the fact that you are invested in the stock market”. - Jason
[04:52] “When you invest in stocks you’re essentially buying a little share of a company and really the amazing part about the stock market is that it gives the common investor access to human ingenuity. Short of becoming a business owner yourself it’s almost the only way to get plugged into innovation as it is happening” - Jason
[05:38] “When you are invested in the stock market as a ‘small investor’ and you’re having the ability to participate in human ingenuity, you’re earning passive income without having to do any work but you have to kind of buy and wait” - Catherine
[06:40] “People tend to compare the stock market to gambling or to a casino and what’s interesting is the longer you stay at a casino, the greater the odds that you will leave with less money than you came with, and probably that you want, the stock market works the opposite way.” - Jason
[09:15] “The way we invest for our clients, and we invest for the long term, it’s not sexy. It’s not.” - Catherine
[10:19] “Stock investing, whether you are invested 100% in stocks or 50% in stocks, it’s going to fluctuate. Part of the reason returns are so good is because there is risk. You’re going to see that value go up and down.” - Jason