Opinion | Investing and Trading is not hard but requires maturity, knowledge and a bit of luck

By: Jwalant Joshi

Since the breakout of the pandemic, a large number of people have entered the capital markets by the easily available technology which offers seamless online trading and investment platforms. Data proves that the number of demat accounts has almost doubled in the past 2 years.

There are several reasons for this superb growth. One is the high-speed internet and easy availability of technologically advanced platforms. One can open a demat and trading account faster than opening a bank account which just a few years ago used to take up to 5 working days. The cheaper brokerage or even ‘zero’ brokerage offered by brokerage houses has made the product more attractive.

Second and one of the main reasons is that these products are marketed-advertised in such a way that anyone can trade and make money from trading in the stock market and new age cryptocurrency market (which is to date not regulated by any laws of India nor any regulatory authority, like Sebi, has control over it).

The third reason is this. FOMO (Fear of missing out). Equity markets moved in one direction which is straight up, after hitting a low in the first phase of the corona pandemic, and during this time most of the people who entered the market made money without using any knowledge by going with the flow and this caused the FOMO effect among those who were missing this quick money-making streak. Teenagers especially entered the market in large numbers to make quick money.

One of our professors once said, “Once you see money or value of something moving digitally on screen in large fluctuations, it will become hard not to get attracted by it. People will try their luck first just to see if they can make something out of it and then soon they get trapped in it.”

Social media frequently shows posts on Rakesh Jhunjhunwala, an ace Indian investor, and the wealth he created. But no one shows how he created it, what’s his background etc. He is a chartered accountant and has devoted his life to understanding the markets. Social media also shows how many people made money but won’t show how many lose everything in trading.

Recently, a top crypto fund filed for bankruptcy and a major trading platform of crypto suspended its operations. This doesn’t mean every platform and every fund will go out of business but those who joined the bandwagon blindly will face a similar fate for sure.

Is it that easy to make money out of trading in capital markets or from crypto? The plain and straight answer is NO. One has to learn something to apply the same in the practical world else that will just be a pure gamble, and in this case, one has to learn all the technical and fundamentals of capital markets before trading on their own.

There is no shortcut to making millions in quick succession. Warren Buffet, Charlie Mungar, Rakesh Jhunjhunwala, RK Damani, and all the successful investors and traders made money through hard work, knowledge, and dedication.

Learn and follow your dreams with the acquired knowledge.

(Disclaimer: The views of the writer do not represent the views of The Global Kashmir. Nor does The Global Kashmir endorse the views of the writer.)-(WION)