Studying How Markets Work Is a Waste Of Time

The stock market is one of the most appealing money-making machines of the 21st century. There has been so much hype built around learning how markets work by pop culture, movies, and other influencers.

People begin buying into this idea of making it big in the market.

Unfortunately, a lot of this stuff is taken out of context and is not really giving you the full picture. How many times have you seen some YouTube ad try and explain how you can become a millionaire day trader?

In most cases, this just isn’t realistic and it can actually be a total waste of your time to even try.

Attempting to be the next Warren Buffet is just not realistic. I don’t think people should be wasting time at home trying to analyze companies.

The stock market is not your friend, and it doesn’t care if you lose money. People like Buffett have been studying this stuff for a long time. For example, Buffett had read every single book on investing in his library by the time he was 12 years old.

I don’t know about you but I don’t think I even knew what investing was at the age of 12. So, why is this important? Well, it shows how far ahead Buffett is from people like us. Warren knows a lot about investing, way more than you or I.

My point is that studying the market is unlikely to make you wealthy alone. In this article, I will explain to you why trying to beat the stock market is a waste of your time and what you should be doing instead.

You Will Never Figure Out How Markets Work

If you’ve read this far, you might be trying to understand why I’m so pessimistic about this. After all, I’m always advocating for people to chase their dreams.

However, there is a way to chase your dreams without doing something unrealistic. The truth is that the stock market is an enigma.

You will never figure out how it works. There is no formula, algorithm, or timing method you could use to master it. The markets do their own thing, and there really isn’t anything you can do about it.

That means spending hours a day studying how markets work is a waste of time. Even big-time hedge fund managers struggle with this. They lose money too, and they are the most educated on the subject.

Wouldn’t it be better spending all of that time starting something like a blog or an online business?

Seriously think about it.

Blogs do indeed take a while to earn money. Yet, it’ll be faster than trying to figure out how to time the market. Plus, on the way, you gain valuable skills in writing, marketing, and social media. These are all skills you can use to get a good job.

Attempting to master the stock market on your own sounds appealing. But the challenge is more complicated than you think it is.

What If I Dedicate All Of My Time to Master Investing?

So, it’s true that there have been many people who have successfully learned how to invest. I’m not saying it’s impossible to do this, just that it’s unlikely.

The chances are that if you have the time to spend analyzing companies all day, you probably are already successful. That is the reality of the situation. You can be successful if you master the value investing style that Warren Buffett does.

However, doing so will require A. Money, B. Time, and C. Dedication. Most people can probably manage with C. But, the reality is that most others do not have the time or the money to spend doing this.

The ones that do are the people who succeed. So, what should you do instead? Well, build your skills and education of course. You might not become a successful investor at first, but you may make it as something else.

I have no idea what that’ll be, but everyone is good at something. You must find what it is you are good at and build it into either a business or a high-paying career. Then, you will have the time and money to invest like Warren Buffett.

Can School Teach You How Markets Work?

I feel that you’re wasting your time studying the stock market on your own. But what about school? Can a good education teach you the secrets you don’t know?

Well, the short answer is no. To quote Charlie Munger:

Charlie munger will teach you how markets work.
Photo Credit: Wikipedia from author Nick

“Much of what is taught in modern corporate finance courses is twattle.”

— Charlie Munger

You aren’t going to learn how to invest in the stock market in school. The purpose of finance classes is to help prepare you for a career as a financial analyst, broker, or investment banker.

Learning about the actual market begins on the job through real-world experience. There also is a misconception about how most people working in financial services make their money.

It’s either through getting paid a very high salary or through high commissions. Investment bankers can make well over $200,000 a year. Likewise, hedge fund managers, brokers, and analysts make money from their clients.

Basically, most people working in finance get rich by making other people money. This isn’t the same as picking stocks on your own.

Technical Analysis Is Hard and Stressful

A chart showing the amount of day traders who try to learn how markets work losing money. This is compared to how many actually make money.
According to Forbes, only 10% of day traders are successful. Meaning that 90% of them are losing money…

When most people get started learning about the stock market, their first instincts are to begin trading. Unfortunately, the success rate of most traders is low.

That is what hedge fund managers have to do. They analyze charts and try to make calls based on where they think the market is going. Even they can be wrong, a lot.

Hedge fund managers and traders who fail to make money for their clients end up losing their jobs. It’s hard enough to make it on Wall Street, do you think you’ll do any better?

It’s a myth that bigger companies have an advantage over average people in the market. The reality is that everybody is in the same boat because nobody knows how markets work.

The real advantage they have over you is their experience and education. That goes back to my earlier point.

Do you have the time and money to spend educating yourself and to experience trading?

If you don’t, then do something else that has a higher chance of success for a shorter time. For example, it takes about four years to become a licensed electrician.

Electricians make good pay since they are in such high demand. It will most likely take longer than four years for you to get rich trading stocks. And of course, that’s if you are even good at it.

The media and pop culture like to glamorize these types of jobs, but the reality is much different. An electrician works fewer hours, has less stress, and takes less time to achieve their goals than a day trader does.

Instead of Studying How Markets Work: Do This Instead

Just think about all of the time you spent learning how to analyze stocks. To be the next Warren Buffet requires hours of dedication and sacrifice. Unfortunately, most people don’t have that kind of time available to them.

Warren Buffett’s father was wealthy enough to support his son. His father would convince him to attend college. Eventually, Warren graduated and got a high paying job. By the time he was 24, he was already making around $114,000 (adjusted to today’s money) a year.

That is a salary that most 24-year-olds would be blessed to have today. For this reason, trying to master the market at a later age is a waste of your valuable time.

People like Buffett are way ahead of us. He was fortunate enough to find his passions early in life. He had a father that supported him and a mentor that offered him a six-figure salary job after college.

Warren Buffett had luck on his side. But, his intelligence and drive had put the odds in his favor. Most of us are not as lucky, smart, or hard-working as him. At least, when it comes to investing, we’re not.

At the age of 12, I was more concerned with video games than I was with anything else. I am 25 years old now, and I don’t make nearly as much as Buffett was at 24. I need to catch up, but following in his footsteps isn’t the answer.

Yet, I have spent the time to find my passion by starting a blog. In the meantime, I was surprised to find out how much I would enjoy it. You need to do the same. Don’t follow Warren; find your passion and figure out how to make money from it.

Educate Yourself and Acquire Skills

Education and skills go hand in hand. They are what pulls people out of poverty and towards a better life. College is a great way to get educated, but it isn’t your only option. Self-education is just as good, read books, and do other things that will challenge you.

However, don’t assume that you have to copy what other people do when educating yourself. Just because Warren Buffett reads certain books doesn’t mean you have to do the same.

Read books that interest you. Doing so will get you to read more and absorb the material better.

Likewise, if you hate a particular subject, don’t study it.

That is the main reason why so many people end up unhappy and changing careers. They follow the norm and do what other people tell them to do. You will never be happy this way.

Focus on Hard and Soft Skills In Demand

Instead of spending your time trying to figure out how markets work, spend it on mastering a skill. Hard skills are something like writing, reading, math, coding, etc. Soft skills are traits that make a good employee, such as etiquette, persuasion, being a team player, and creativity.

Here is a list of the most in demand hard skills in 2020:

  •  Blockchain
  • Cloud computing
  • Analytical reasoning
  • CopyWriting
  • SEO

Blockchain coding is one of the most in-demand hard skills on the planet right now. It’s also rare, meaning that if you learn it you will become a valuable asset to companies.

Don’t you think you’re better off spending your time mastering a skill than trying to time the market? Imagine spending hours a day to become a good copywriter.

Realistically, once you master that skill, the career opportunities you’ll have available are endless.

The same goes for SEO.

Every company today needs someone who knows how to write and who can do SEO. Combining those skills will ensure you can make money. However, it doesn’t have to be through only traditional employment.

You could also start a business with those skills. These options are a lot more realistic and faster than trying to become an investor.

Furthermore, soft skills are just as important to develop for professionals. Here are some soft skills you should look to gain:

  • Listening
  • Verbal Communication
  • Respect
  • Confidence
  • Friendliness

People underestimate the value that soft skills provide. In most cases, it’s more important to have these skills than hard ones.

Achieving confidence means that you’ll have the drive to succeed. Friendliness means you’ll work well with others, and verbal communication will allow you to express your thoughts in words.

These skills will get you far in anything you pursue.

Learn skills instead of trying to learn how markets work.

Invest In The Stock Market Passively

The majority of people don’t have the time or money to teach themselves how markets work. Investing in individual stocks is complex and risky. What’s the point of stressing yourself out over this?

Sure, you might get lucky and win big with one stock. However, the chances of this happening are very slim.

Most people lose money by investing in individual stocks. Unless you have all day to focus on this, you should probably consider another option.

Though, it’s not all bad news. Index funds are a great way for you to grow your money passively. An S&P 500 index fun, for example, follows the trend of the entire market.

They are the safest investment since you’re essentially betting on America.

But, are there still risks? Of course! Every investment will have risks of some kind. However, they aren’t nearly as many risks as there are with individual companies.

The reason is that, historically, the stock market has been proven to go up over time. Individual companies are riskier since they have to compete. Even the strongest companies will face some type of competition eventually.

That’s why the greatest bet you can make is on the stock market as a whole. Your money will be safer and beat out inflation at the same time.


Investing in the stock market isn’t for everybody. Trying to find the secret of how markets work and function is just not always a good idea. It’s mostly a waste of time.

You can spend that time doing something you are good at that will make you money quicker. In the meantime, just invest in index funds and let your money grow on its own. I know it sounds boring but investing in individual stocks and day trading isn’t for everyone.

Yet, if trading and investing are your passions and you think you can make a career out of it then don’t let me stop you.

All I’m saying is that you need to have a plan. If you’re researching stocks just because you saw some YouTube video explaining how you can get rich, you might want to reconsider.

Not everyone is meant to be a great investor. However, we all can reap the benefits of the stock market by investing in index funds and growing our money over time.

I know it sounds boring, but at least you’ll have a retirement fund waiting for you. Which, as I’m sure you know, not everyone is fortunate to have today.

Hey there! I'm Alex, a freelance writer, and blogger. I started my journey towards FI in 2018, when I created this blog. I love talking about blogging, writing, personal finance, and internet entrepreneurship. If you enjoy my content, stick around, and we'll share ideas for reaching FI together!

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