Why Most People Lose Money in the Stock Market?

This article first appeared on Dividend Titan's Weekly Wealth (Email Newsletter).

Monday, August 2020, 7:16 pm.

It was a moment I'll never forget.

That day was unexpected. What turned out to be a regular baby scan was a rush to the delivery ward. We had no idea. My wife was overdue by a week.

My entire nine months of waiting boiled down to that one single moment -- that moment (crouching beside my wife, seeing the doctor carried an alien-looking being) when our second son, was born.

I find the best things in life are always well worth the wait.

As Warren Buffett likes to say: "You can't produce a baby in one month by getting nine women pregnant."

No matter how much talent you have, some things just take time -- learning a music instrument, growing a plant, completing school, growing your wealth.

For me, it was completing (struggling) university, getting my job promotion, even passing one of the toughest financial exams, the CFA program (I took five years and two failed exams, while seeing all my peers passing it at one go).

All these take time, you can't rush into it.

Why 95% of investors lose money in the stock market

What often separates the top 5% investors from the rest is this -- most people simply don't have the patience. That's why many of them lose money in the stock market.

People wouldn't commit. Often, they treat stocks like gambling. Betting which stocks will go up the next day. Sometimes the next few hours. But most of the time, people watch the market everyday like watching a game of roulette.

As much as investing is a personal journey, I take it professionally. I don't "dabble" in investing this way.

You see, when you buy stocks, you treat it like buying a business. You nurture, watch them grow over time. You don't buy a business today and sell it the next day. That's what most people do.

Wealth creation is not an event

If you ask me, I'd say wealth creation is not an event, but a long term process of accumulating solid, dividend growers at a fair price. That's how you can hit your 49% dividend yield.

You need patience to let the shares appreciate, your dividends grow and compound. I guarantee you'll consistently make more profits when you hold stocks for the long term.

Constantly watching the financial media, and hearing the hottest stock picks from friends are going to make you anxious, distracting you from making the key investing decisions.

You fall into the trap of making unnecessary buy and sell calls.

I know it feels safe that you must be in the know of the market everyday.

But here's the thing, you don't have to do that.

I assure you, as long you pick the right stocks, your battle is already more than half won.

You control your life, don't let the market control you.

Sometimes, investing can be simple.

Always here for you,

Willie Keng, CFA

Founder, Dividend Titan

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