These mistakes are expensive when you start on the stock market

(BFM Bourse)-2021 was a great year in the financial markets. CAC 40 recorded an increase of 29.2%. This represents one of the best annual achievements since its founding in 1987. What evokes investors unfamiliar with the profession, especially the financial markets. For some neo-traders, this year’s first contact with the whimsical stock market was sometimes rough …

What we learn is to make mistakes. And in the stock market, many beginners who started in recent years stumbled on the first step, holding the key to financial disappointment.

The first memorable mistake of 47-year-old teacher Mickaël was “due to poor knowledge of the system.” After the failure, he noticed that he had three times as many shares as Orapi, a manufacturer of hygiene products listed on the Paris Stock Exchange. In April 2020, he tried to buy securities shortly after 5:30 pm, during the “fixed” period used to record the last transaction before the market closed completely at 5:35 pm increase.

“The purchase didn’t show up in my wallet, so I clicked it again to try the purchase again and did nothing because of the bug. I’ll try again but nothing yet. It all disappeared at 5:35 pm! He later realizes that this is how this five-minute buffer zone works, and he lost about 600 euros because “the next day, the title was reduced by 40%.”

A good knowledge of the tools could have prevented Internet users from losing some of their biotechnology investment in Ose Immuno. He earned “12% in one session” before inadvertently “hospitalizing in the emergency room the same night”. As a result, when he was discharged three days later, he lost 28% and “did not know what the stop loss was.” “It would have allowed him to automatically sell his stock when the price was too low.

Young people attracted to cryptocurrencies

The loved ones of the general public are certainly a very volatile cryptocurrency market, an unpredictable asset that attracts many young people like David, who plunged in March 2021. “Tell me” before investing … and lose “500 euros out of a total of 750”. “At first you inevitably lose money. That’s the way you learn,” he relativizes.

Investment errors can be costly, especially for individuals who believe they have detected a nugget, and can be helped by false advice. Mickaël surfed a lot on Boursorama and its discussion forums, but he said, “there are a lot of scammers in these forums.”

Inundated with (often misleading) videos and advertisements that promote incredible profits, individuals try to maximize their profits and sometimes take reckless risks. Nicolas Chéron, a strategist at Zonebourse.com, testifies that he receives hundreds of messages daily from individual investors.

He found that these traders prefer risky investments at highly variable prices. Also, citing Bloomberg’s chart, the panel of consumer favorite stocks has fallen by more than 30% since the beginning of the year, while the benchmark American index S & P 500 has fallen by 15% at the same time.

Transaction boom

Grégory Guermonprez, director of the online bank Fortuneo, evokes a wave of new traders who arrived at Fortuneo two years ago. “The number of customers on the stock market has increased by 60% since January 2020,” he said.

In the first quarter of 2022, more than 3 million Europeans were active in the financial markets and executed about 30 million euros, according to a financial firm in Autorité des marchés, a French stock market police officer. 2018. At Fortuneo, these newcomers average 32 years old, one-third of whom are 18-25 years old. Guermonprez explains that 70% of them are men and are rather “autonomous” in their investment.

The question arises of retaining this new customer when the market environment deteriorates sharply. Stocks have skyrocketed since the beginning of the year. Since the beginning of this year, CAC 40 has lost almost 11% when the US index suffered a larger loss: Dow Jones lost 12%, S & P 500, New York Stock Exchange flagship index over 15 Returned% if Nadsaq has a strong technical tone, is more sensitive to rising interest rates and has fallen by more than 25% during the period.

Sabrina Sadogi with AFP

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