How to Go Broke in the Stock Market in 10 Fun and Easy Steps!

If you’re like me and you’re looking to learn how to go broke in the stock market, keep reading. This blog post is for you!

It’s happened to the best of us. We get all excited about investing in the stock market, only to have our money disappear overnight. And it’s not like we’re talking about a few hundred dollars here: we’re talking about going broke.

By the end, you’ll be an investing pro and on your way to crashing your entire life savings. Thanks for reading! 😊

1) How to go broke in the stock market – Invest in high-risk stocks

All investing involves risk, and the more you risk, the higher your potential reward, and also the greater your losses if that risk doesn’t pan out.

The more volatile the stock, the greater the chance that it will lose value quickly. Look for stocks with a beta coefficient higher than 1 – this means they are more volatile than the overall market and are therefore more likely to see large price swings. 

For anyone looking to ignore their own financial security, investing in high-risk stocks is a surefire way to achieve that goal. High-risk stocks are usually those that are highly volatile and have a higher chance of defaulting. While they may offer the potential for high rewards, they also come with a high degree of risk.

As a result, investors in high-risk stocks often see their investment portfolios take a major hit when the market takes a turn for the worse. So, if you’re looking to lose money quickly, breaking into that emergency fund and investing in high-risk stocks is definitely the way to go.

2) Invest in penny stocks – they’re a great way to lose money quickly

For the uninitiated, penny stocks are shares of companies that trade for less than $5 per share. They’re often penny-wise and pound-foolish investments and they’re a great way to lose money quickly.

The vast majority of penny stocks are worthless. Why? Because most penny stock companies are thinly traded, highly leveraged, and have questionable accounting practices. And even if you do find a gem among the bunch, it’s hard to unload your shares when no one else will spend money buying them, because most people in the stock market are trying to make money. But not you, you’re a renegade!

So if you’re a day trader with years of trading experience and a track record of success under your belt, you’re probably steering clear of penny stocks. But then again, you are probably looking to increase your wealth and not go broke in the stock market.

3) Trade stocks on margin without fully understanding the risks involved

Stock trading on margin can be a risky proposition – even for the most experienced investors. When you trade stock on margin, you are essentially borrowing money from your broker to purchase shares.

This can magnify both your gains and your losses, as you will owe your broker interest on the loan. What’s more, if the stock price falls below a certain level, you may be required to provide additional collateral to cover the loan. So not only will the value of your holdings be worthless, but you’ll owe money too!

One of the age-old pieces of advice is to never put all your eggs in one basket. However, when it comes to stock trading on margin, many people are willing to do just that. By definition, margin trading involves buying stock with borrowed money from your brokerage account or other financing sources.

If you’re trying to lose money, consider trading on the margin on High-Risk stocks and Penny stocks to REALLY amplify the losses.

So if you’re in the market to lose a lot of money, make sure to trade on margin before you know what you’re getting into.

3. Follow stock tips from unreliable sources instead of doing your research

There are all sorts of stock tips out there, and it can be tough to know who to trust. After all, even the most reliable sources can be right sometimes. And if you’re trying to lose money and jeopardize your financial security, we just can’t have that.

So instead of doing your research or following investment advice from reliable sources with track records of investing success, why not just follow the tips from unreliable sources? That way, you can be sure that you’re getting bad information!

And if your investments go south, frying your retirement nest egg, you can always blame the source. After all, it’s not your fault for following bad advice – it’s their fault for giving it in the first place.

So go ahead and take that stock tip from the guy at the bar – it might just make you rich! Or, more likely, it will lose you a lot of money. But either way, you’ll have a good story to tell.

4) Buy high and sell low

Buy high and sell low is a popular investment strategy among those looking to lose their money in the stock market. In fact it is probably the most common investment strategy among traders and investors of all stripes.

The idea is simple: buy an asset when it is expensive and then sell it when it is cheap. That way you spend as much of your money as possible when you buy and then lose most of that investment when you sell, locking in those losses.

Moreover, buying high and selling low goes against basic principles of investing if you are looking to make money, which states that one should buy low and sell high.

So if you’re serious about losing money in the stock market, Follow the herd and sell low, after buying high.

5) Panic when the market takes a downturn and sell all your stocks at a loss

Panic selling is often cited as one of the main reasons why investors lose money in the stock market. When the market takes a downturn, unprepared investors can quickly become overwhelmed with fear.

In the heat of the moment, they may sell all of their stocks at a loss, without considering the long-term implications of their actions.

Panic selling can also trigger a domino effect, as other investors see the sell-off and begin to sell their stocks. This can cause the market to decline further, amplifying the losses of those who sold during the panic.

But the real key, to losing money during panic selling is to be brave enough to wait for the stock to decline a certain amount and then sell towards the end of the panic. This way you lose as much money on the stock as possible.

6) Ignore your investment account and your portfolio for months or years at a time, only to try and play catch-up when the market has already recovered

It’s a common practice for those who are looking to lose money in the stock market to ignore their investment portfolio for months or years at a time and then try and play catch-up when the market has already recovered.

This is a form of buying high and selling low. You see after the stocks in your portfolio have taken a nose dive and your portfolio becomes next to worthless, you naturally just want to focus on something else.

Trust this instinct if you’re trying to lose money. Instead of righting the ship, loading up on solid companies with proven track records that you discovered by doing intensive research, just let your portfolio sit there with all the losses mounting. After all, you haven’t lost money if you still think you have the money right? What was that about a tree falling in the woods?

7) Definitely don’t invest in index funds or ETFs

Listen, Index funds and ETFs that track major indices like the S&P 500 have outperformed up to 80% of actively managed mutual funds and other investment baskets for the last couple of years now. So while they do follow the market when it goes down, the investment risk is much lower than single stocks, because they are always dropping the least performing stocks. That means that if you invest in them, you are likely going to make money in the long term.

Meaning if your goal is to lose all your money in the stock market, they are among the investment options that you are going to want to avoid. You should instead put your money into something that is high risk and likely to lose money, like penny stocks or cryptocurrencies.

8) Get all your investment ideas from social media, TV, or friends

If losing all your money in the stock market is one of your financial goals, make sure to get all of your investment ideas from social media, TV, family members, or friends. After all, these are some of the least reliable sources of information out there.

Your friends probably don’t know anything about investing, and social media is full of people with agendas that are often misinformed about the markets.

And as for TV, well, it’s entertainment first and foremost, and a great place to be entertained about the Markets, while you’re losing all your money on the risky investments we talked about earlier.

9) Trade on emotion, not logic

Trading on emotion is one of the surefire ways to lose all your money in the stock market. When you let emotions like fear and greed guide your investment decisions, you are more likely to make impulsive decisions that are not based on sound logic. Which is perfect for losing money.

Is the stock market riding high? Well, your missing out on the action, go find a hot stock to drop your life savings in!

Is the stock market going down? Well, that’s just a perfect opportunity to buy more of the same stock that just lost you half your net worth!

Dollar-cost averaging, target date funds, stock allocation, mutual fund investing, target date fund investing, total stock market index funds or etfs, none of the technical or fundamental research and analysis matters when you’re trying to lose money. Just react when your emotions are at there peak!

See how easy it is to lose money when you let emotions guide your investment decisions? It’s like taking candy from a baby, or rather funds from your retirement accounts.

10) Don’t diversify your portfolio to ensure you have 0 Retirement income

If you want to lose money in the stock market, make sure not to diversify your portfolio. This way you can put all your eggs in one basket, and if that basket ends up being a dud, your entire portfolio will go down with it.

Did you hear a hot stock tip from someone, maybe it was a good buddy of yours, or perhaps you were reading something on r/wallstreet bets, or you heard something on CNBC. Well, that is just a sign from above telling you to invest all your hard-earned cash into that one stock.

11) BONUS: Don’t use tax-efficient accounts or strategies when trading

Investing with pre-tax dollars is for squares. Putting your money into tax-efficient accounts is simply a way to keep yourself from saving money on taxes. And everyone loves spending as much money as possible on taxes.

Taking advantage of a 401K, IRA, or other tax-advantaged accounts will only save you money that you had earmarked for your massive losses. So when you start investing, make sure it is done as inefficiently as possible

Conclusion

So, if you want to go broke in the stock markets and have o retirement income, just follow these 10 easy steps. By investing in high-risk stocks, trading on margin without fully understanding the risks involved, and following unreliable stock tips instead of doing your research, you’re practically guaranteed to lose money.

And if things aren’t going south fast enough for you, don’t hesitate to sell all your stocks at a loss – even if it means wiping out all your previous gains.

Finally, try not to pay attention to your investment portfolio for months or years at a time and ignore all sound financial planning advice; that way, you won’t have any idea when the market has already recovered, or adjusted your allocations to meet your investment horizon, and by the time you do investigate years or decades from now, it will be too late to recover.

But if you’d rather make money instead of losing it, I don’t know why, losing money and self-esteem is so awesome! Do the opposite and appropriately balance your stock risk allocation between low-risk and high-risk stocks, trade on margin responsibly (with the right knowledge and guidance and good strategy), only invest in what you understand, avoid emotional trading based on market volatility or bull runs, minimize investing in taxable accounts and focus on tax-friendly investing, and diversify your portfolio.

It may take a little bit more effort than blindly following others’ investment advice or trading based on your emotions, but it will be worth it in the end.

https://www.investopedia.com/articles/stocks/07/beat_the_mistakes.asp
https://www.winvesta.in/blog/10-common-mistakes-to-avoid-when-investing-in-global-stock-markets/
https://youtu.be/PNwD3P5B5Jo