Why are Americans avoiding the Stock Markets; fear or lack of money?

Jon Economy, Education, Market Commentary

A champion is afraid of losing. Everyone else is afraid of winning.
Billie Jean King
The financial crisis of 2008 scarred many individuals and scared away even more; add in the Great Recession, and one can see that the average can come up with many reasons to avoid the stock market. To make matters worse, the unemployment rate remains stubbornly high, and wages in most instances are dropping instead of rising which means that many Americans have little to no disposable income left after expenses. Don’t for one second believe the twisted statistics issued by the BLS (Bureau of labour department); those statistics are on par with toilet paper.
Individuals making $30,000 or less per year are more likely to avoid the stock market, citing insufficient funds as one of the main reasons. There appears to be a misconception in thinking that one needs a lot of money to invest in the markets. Nothing could be further from the truth. One can start off with small amounts and slowly add to this base over the years.; the power of compounding is amazing. If you start young enough even putting away $50-$100 a month can add up to a sizable bundle by the time you retire.
Another misconception is that investing in the markets is risky especially after the crisis of 2008. If one is investing for the long haul and in quality stocks, then investing is one of the surest ways of making money and building a sustainable nest egg. However, one needs to understand what one is getting into and not pluge into the markets blindly as is the case with most individuals.
Lack of education
We are referring to financial education and not higher education from institutes such as colleges or universities. We would even go as far as to suggest what these institutes teach regarding the stock market is useless. If you want to learn something, you need to allocate some time to it and then put that knowledge into practise. Regarding the stock markets it would be wise to look at the history of the markets; study past stock market crashes; the events that lead to the crash and events that set the foundation for the next bull run. Then paper trade before deploying your hard earned cash?

This post was published at GoldSeek on 24 October 2016.