MyMoney Online, Personal Finance with Warren Ingram

The stock market is not a casino. Investing in shares is nothing like gambling

Investing in shares over longer terms is nothing like gambling.

The stock market is not a casino.

Stock market investors - they're not simply hoping that luck is on their side. (pixabay.com, 2019)

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.

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This article first appeared on CapeTalk : The stock market is not a casino. Investing in shares is nothing like gambling


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