Owning Stocks Is Misunderstood - Deepstash

Owning Stocks Is Misunderstood

Here’s what is missed about stocks:

  • Bubbles — Stock market bubbles can be seen everywhere throughout history. 
  • Stock printing — Many tech stocks can be created out of thin air and they don’t pay dividends. 
  • Money printing — The US is printing trillions of dollars out of thin air. This creates inequality — the rich get richer and the poor get poorer. 
  • Economic fundamentals — Record unemployment and the GDP of a country eventually catch up and affect stock prices. 
  • Markets are driven by psychology — If the collective optimism of a nation like the US changes, then so do the stock prices. 

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Real Estate Is the Classic Myth

A lot of real estate is overpriced. People make the mistake of thinking if they just buy property and collect rent then they’ll never have to worry about money again.

Here’s what is missed about real estate:

  • Having a huge pile of debt creates stress.
  • Being tied to an investment gives you less flexibility.
  • Real estate is expensive which means often people have no money leftover to invest elsewhere. This leads to a lack of diversification.
  • There is a lot of dreadful real estate out there.

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The way to solve these issues with two of the most hyped assets in the world is to understand the context. It’s to understand how stocks and real estate actually work. It’s to do deep research on both. It’s to understand the context around your investing decisions.

The herd of sheep fall for delusional headlines and hype. The eventual millionaire investors do the opposite. They understand the context and model out multiple scenarios. They don’t take blanket advice like “stocks always go up in the long run.”

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