The 5 Biggest Stock Market Myths

By: Team Stash

Published: Oct 24, 2017

•  Updated: Jun 09, 2026

When it comes to investing in the stock market, there are a lot of misconceptions. Hollywood films where people lose millions in a day, bad advice from the not-so-knowledgeable, and lack of information can spook people into believing that the market is just a place where people go to lose their money.

Investing in the stock market is not a winner take all, must-be-a-millionaire, risk-taking endeavor. Investing is for everyone — you just need to be able to separate myth from the truth of what it all really means and the risks involved.

Below, we explain what the stock market is and five of the myths that could keep you on the sidelines:

What is the stock market?

The stock market, in its most essential form, is where people exchange their money or “cash” with people who own fractions of business or a company. People who invest in the stock market want to benefit from the growth of sales and profits of a business. Stock investors can be rewarded if the business grows in sales and profitability. At the same time, they can lose money if the company fails to grow or generates losses.

There are literally thousands of businesses in the stock market. You can invest in a vast array of companies within many industries. Some examples include renewable energy, oil, retail, defense, restaurants, and airlines. If a company is publicly traded, that means you can purchase stock in it. There is probably a company in the stock market for any industry you can imagine.

Many of the companies you interact on a daily basis are listed in a major stock exchange such as the NASDAQ. Apple, McDonalds, Google, Facebook, Walmart, Exxon, Starbucks, Michael Kors, Nike, and thousands more are some of the companies available in the stock market. You become a fractional owner of that company when you purchase their stock.

The value of a company depends in the profits and sales it will generate in the future. Companies like Amazon, Apple, and Walmart have grown steadily over time. Not all companies fare as well. A business can also fail to grow revenue and profit and generate losses; remember Blockbuster, Pets.com or Kodak?

Myth #1: Investing is like gambling

Many people, especially the non-finance savvy, shy away from investing in the stock market because they believe investing in stocks is like gambling. But the two couldn’t be more different.

Gambling means you take a risky action with your money in the hope of a quick and easy result, usually with odds against your favor. Ask anyone familiar with gambling and they’ll say “the house always wins.” Since casinos are in the business of making money for themselves that means you have to lose.

Investing involves a certain amount of risk. But by building a diversified portfolio with stocks, bonds and holding from multiple sectors (tech, energy, blue chips), you’re balancing out your risk.

Myth #2: The stock market is only for people who work on Wall Street.

Investing in the stock market is for everyone. Sure, the men and women who work on Wall Street have built careers out of investing and are more involved into the intricate mechanics of how it works. But this doesn’t mean that they’re the only ones with the knowledge to invest.

If your end goal is putting your cash to work in the hope to build a better saving nest for your future, there’s no reason why you shouldn’t feel confident investing in the stock market. The Stash app is one way you can start investing and learn how investing works along the way.

Myth #3: I’m too young to care about investing in the Stock Market

The longer you wait on investing the more likely you are to miss out on the power of compounding. Did you know you would have more money by investing $100 a month for 20 years than $200 a month for 10 years assuming an interest rate of 5%?

Compound interest is a mathematical calculation that shows the rate at which the value of your investment changes. What makes the concept of compound interest powerful, however, is the  combination of time and steady monthly investments.

Myth #4: I need lots of money to start investing.

This is no longer the case. Technology has helped investors and the overall financial services industry to become more efficient and competitive. Investors now can start investing in stock market with just a few clicks. At Stash, you can start investing in the stock market directly from your smartphone with only a minimum of $5.

Myth #5: The market is too high, I should just wait for the next crisis to buy low and sell high

As Stash CEO Brandon Kreig says, “It’s All About Time in the Market, Not Timing the Market.”

No matter if the market is going up or down, the way to approach this effectively is by buying small amounts of your investments on a regular basis. This is called dollar-cost averaging and it works by allowing investors ease into the market, helping them to diversifying the price they are paying for an investment.

Key takeaways

It’s not about how much money you have or how much money you can invest. It’s all about being consistent, putting in small amounts of money over time and thinking about long-term goals, rather than quick wins.