Do you feel like investing or trading in the stock market is like betting it all on red in Las Vegas? When you hear about people building wealth from the stock market do you pass it off as a lucky streak? Do you think your broker is a crook? Well, I can’t answer that last question for you, but I can clear up a few misconceptions about investing and gambling. Below is a chart I found on Thedigeratilife.
Ok there are some common threads between investing and gambling; they both involve risk, both can be addictive and destructive. But, those common threads do not put investing and gambling in the same category. Risk is exposure to chance of loss or damage. Investing looks to manage risk while gambling takes no regards for it. Also, anything you do can become addictive depended upon the person involved. From food to prescription drugs and everything in between can become addictive and ultimately destructive.
So is investing in the stock market gambling?
Absolutely YES, only if you have NO idea what you are doing! It’s like trying to predict the weather a week from now. Your answer would be a pure guess.
So…is investing in the stock market gambling?
Absolutely NOT, when you are skilled, prudent, and disciplined. Now, if I asked a meteorologist, what the weather will be like a week from now, I would have more confidence in his or her answer. Why? A meteorologist would study past weather patterns, take into consideration current conditions, and then use specific tools to help predict weather movements.
The difference between your answer and the meteorologist’s answer is the meteorologist derived his or her answer after following a trusted process and system of thinking.