Dark Truth Of the Stock Market

There is a very famous dialogue from Scam 1992 that the stock market is such a well that can quench the thirst of money of the whole nation. If this is true, then why is it that why 7 out of 10 people who invest in the stock market lose their money? Today everyone is praising the stock market and keeping such an image like you come and leave here after becoming rich. But its reality is something else. Its dark side is so dangerous that you cannot imagine.

Nowadays, such scams are going on in the stock market that can rob you of your lifetime's earnings in a jiffy. But have you ever thought that how is all this happening and if it is happening then why no one is able to stop it? I will tell you what we can do at our personal level so that we can stay away from such scams.

How do these scams happen?

If you want to avoid any scam, then first of all you should know that how are these scams? Mainly you will see these three things happening inside the stock market.

1. Stock manipulation

Before understanding this, we should know how the last stock market works?

Whenever a company needs money, then that company raises money from the general public, in return of which the shares of the company are given to the public. Whenever someone buys shares of a company, he can earn profit in two ways.

1. Buying shares at a lower price and selling them at a higher price.

2. Dividend: Whenever the company earns profit, it distributes some profit to its shareholders which is called dividend.

There are two factors for the stock of any company to go up or down.

1. Company performance

2. Demand and Supply

After all, how is a stock manipulated?

One of two things play a role in the manipulation of any stock.

1. If there is any manipulation in the financial data of the company. Exaggerated the profits of the company or concealed the losses of the company.

2. By manipulating the trade volume of a stock. If a big party buys or sells a stock in bulk, in such a situation the price of a stock can suddenly go up or down.

All this manipulation is done through paid media. In this, money is given to the media houses and they tell good things about the stock, and millions of people invest in US stock because of the talk of these media houses, which increases the price of the stock.

Nowadays stock manipulation has started happening through social media also. In which Instagram and WhatsApp are prominent. Most of us invest our money in those things.

2. Stock Market Tips

Nowadays some such WhatsApp groups, Telegram groups are available which will be seen giving you different stock tips, these people claim that you are guaranteed to profit from their tips. Many people join these groups out of greed. There are many other people like you in these groups. The people operating this group divide all the people equally and make two different groups.

Suppose if the total members are 1000, then these people make two groups of 500-500 separately and in one group they will predict the stock to go up and in the other group the stock will go down. As you all know any stock will either go up or down. Similarly, this process is repeated again and again. Once your trust is done on these groups, then you are offered premium membership, the fees of which are several lakhs of rupees.

They block you as soon as you subscribe and you are at a loss.

3. Insider Trading

Using any such information of the company which is not in the public domain is called profit making. This is an illegal act. Insider trading is very difficult to catch because in most cases it is difficult to trace who is in possession of the information.

Conclusion

In today's date everyone wants to become rich, there is nothing wrong in this. But the shortcuts people use to get this thing can sometimes be overwhelming. In the last, I would suggest you that if you want to invest in the stock market, then do not get involved in anyone's talk and invest only after doing your research.