investing

Investing in the Stockmarket is Gambling…or is it?

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.

Investing

  • A good thing, involves risk
  • Can be addictive and destructive
  • Is business
  • You save for a specific goal, such as retirement
  • A Continuous process pf deployment of capital in search of continually increasing net worth. Delayed gratification is implied
  • Ownership of something tangible
  • Based on skill requires the use of a system based on research

Gambling

  • A bad thing, involves risk
  • Can be addictive and destructive
  • Is entertainment
  • You’re just having fun
  • A specific act or series of acts centered around immediate gratification
  • No ownership
  •  Based on luck and emotions

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.


Discussion

3 comments for “Investing in the Stockmarket is Gambling…or is it?”

  1. […] Investing in the Stockmarket is Gambling…or is it? […]

    Posted by Stock Market Predictions And How You Can Profit From Them | Daily … | March 18, 2009, 8:12 am
  2. […] Investing in the Stockmarket is Gambling…or is it? […]

    Posted by STOCK MARKET WATCH, Tuesday March 17 | March 18, 2009, 8:13 am
  3. I actually might consider Texas Hold’em Poker very close to TRADING the stock market. If you are skilled and know the odds you can be pretty safe in a poker game.

    Naked trading of options without more strategy than technical analysis is probably more gambling than poker.

    Posted by Stephen Reid | March 18, 2009, 12:36 pm

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