Why Do People Lose Money Investing in the Stock Market? Ep #28 

<p>Why do some people have a bad experience investing in the US stock market? Why do they lose money? More importantly—<em>how</em> do they lose money? In this episode of Retirement Made Easy, I walk through the decisions that would lead someone to lose money in the stock market—and how to keep that from being you. </p> <h2>You will want to hear this episode if you are interested in...</h2> <ul> <li aria-level="1">[2:31] What the research about the stock market tells us</li> <li aria-level="1">[6:26] Why people have bad experiences investing in the US stock market</li> <li aria-level="1">[10:05] BTN research on the S&P 500</li> <li aria-level="1">[12:20] How can you lose money in the stock market?</li> </ul> <h2>What the research tells us</h2> <p>The NYSE is over 200 years old. The S&P 500 was started in 1957. We have a long time period to look back and see how the stock market has performed. <a href= "https://jnl-mkt-prod1-m.campaign.adobe.com/nl/jsp/m.jsp?c=%40QyjoEACuWObvlC0KYySnalRPDi6EzSSQZ9f%2FBWVPjOo%3D" target="_blank" rel="noopener">Research done by BTN</a> shows that every time the market has gone down, it’s come back. Every time it’s come back, it’s set new <em>record-highs</em>. </p> <p>So how do so many people lose money? Because fear is a bigger emotion than greed. Many investors are short-sighted and short-term focused. They’re more worried about losing money than making money. Peter Lynch was quoted saying, “More money was lost preparing for the next correction or crash than the actual correction or market crash itself.” I agree. </p> <p>An old farmer on his porch was approached by a stranger who asked for a glass of water. The stranger asked how his corn crop was doing. The farmer said, “I didn't plant any.” He was afraid of corn blight. The stranger asked how his soybeans were doing. His response: “I didn’t plant any of those either.” Why not? He was afraid it wouldn’t rain. </p> <p>The farmer didn’t plant anything—he just played it safe. That’s how a lot of people invest in the stock market. Th