Investing in shares over longer terms is nothing like gambling.
The stock market is not a casino.
Gambling - unlike investing in shares - is a zero-sum game whereby money is taken from the loser and given to the winner.
Nothing is given in return and no value is created.
When you invest in the stock market, you’re buying a piece of a company.
You become an owner of the company’s assets and you share in its profits.
How is this like gambling?
The value of shares is extremely volatile over short terms.
So, it’s a “gamble” in the sense that, if you’re in it for a quick gain, then you might have to sell when the stock is down, thereby losing money.
However, even if the value of the shares you own falls, you’re not left with nothing, you still own part of a company (admittedly one that is worth less than before) and next month the stock might be up again.
Stock market investors don’t just randomly chuck their money into an investment.
There might be some uncertainty regarding outcomes, but you're not simply hoping that luck is on your side.
(Click here for more personal finance articles.)
Get the 10 most-read articles of the week from Bruce Whitfield’s The Money Show, emailed to you every Friday morning:
Recommendedby NEWSROOM AI
Most personal finance advisors suggest reducing “risk” a year or two before retirement. Ignore them, reckons Warren Ingram.
After a "calamitous” mini-budget, Austen Morris Associates does not see a single reason to invest any discretionary funds in SA.
Made a mistake when paying by EFT? You're going to battle to get your money back, warns consumer journalist Wendy Knowler.
Bruce Whitfield interviews the legendary Springbok about his attitude toward money (hopes and fears, successes and failures, etc.)
The Money Show’s Bruce Whitfield interviews Professor Jonathan Jansen about his attitude to money and beliefs about it.
The Money Show’s Bruce Whitfield interviews Stransky about his attitude to money (hopes and fears, successes and failures, etc.)
Khabazela shares tweets and Facebook posts that have gone viral.
SAA Pilot's Association former chair, Captain Piet Taljaard says the core does all the work while management is clueless.
Personal finance expert Warren Ingram (Galileo Capital) on how to raise financially free children.
Personal finance expert Warren Ingram offers a definitive answer with an explanation ordinary people can understand.
If you do things differently, it’s possible stop working far earlier than you ever thought possible, says Warren Ingram.
Steinhoff’s Web of Deception: An Explainer with Financial Mail journalist Warren Thompson.