I want to know about this side of stock market. Please help!
What percentage of people lose money in the stock market over several years?
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Depends on what they're doing and what "several years" means.
Someone who buys and holds a broad-based mutual fund over a long enough time horizon without selling any of the stocks has historically more or less zero chance of "losing" money. That is, over a long-enough period of time (which is a # somewhere between 15 and 30 years), no period in US history has led to a real loss. The question of how real this loss of risk with "time diversification" is does cause some debate within academics over the last couple decades, depending on if you truly believe the market is random or reverts to the mean, but in general, the assertion that in the long-run stocks always go up holds (in an industrialized market that doesn't suffer a communist revolution).
On the other hand, someone who is day-trading individual stocks is almost certain to lose a ton of money eventually. In fact, anything that requires predicting short-term movements in stocks is almost certainly a losing strategy.
What about if you're in between? Not talking about a 20 year time horizon or a 20 day time horizon, but something like 3-5 years? In general, the likelihood of a real loss at the end of a 5-year horizon with a broad investing strategy is on the order of 10-15%. The likelihood of a real loss at the end of a 5-year horizon with a narrow investing strategy (pick and choosing individual stocks) is much, much higher and will depend on how much trading you're doing and just how few stocks you're concentrated amongst.
Someone who buys and holds a broad-based mutual fund over a long enough time horizon without selling any of the stocks has historically more or less zero chance of "losing" money. That is, over a long-enough period of time (which is a # somewhere between 15 and 30 years), no period in US history has led to a real loss. The question of how real this loss of risk with "time diversification" is does cause some debate within academics over the last couple decades, depending on if you truly believe the market is random or reverts to the mean, but in general, the assertion that in the long-run stocks always go up holds (in an industrialized market that doesn't suffer a communist revolution).
On the other hand, someone who is day-trading individual stocks is almost certain to lose a ton of money eventually. In fact, anything that requires predicting short-term movements in stocks is almost certainly a losing strategy.
What about if you're in between? Not talking about a 20 year time horizon or a 20 day time horizon, but something like 3-5 years? In general, the likelihood of a real loss at the end of a 5-year horizon with a broad investing strategy is on the order of 10-15%. The likelihood of a real loss at the end of a 5-year horizon with a narrow investing strategy (pick and choosing individual stocks) is much, much higher and will depend on how much trading you're doing and just how few stocks you're concentrated amongst.
