Gambling Vs Stock Market

• The long history of the stock market in America has had many ups and downs, but overall, is it a good risk or just plain gambling? The World's online gaming authority since 1995.
• Betting Line In the stock market, institutional investors drive the prices of stocks. In publicly-traded arenas (like the equity market), institutional money is considered to be invested with more sophistication and precision, in comparison to their retail investor counterparts. Institutional money is the equivalent of 'sharp' money.

• Casino Gambling Vs Stock Market
• Sports Betting Or Stock Market
• Sports Betting Vs Stock Market
• Sports Gambling Vs Stock Market

Investing vs Gambling. While investing involves risk, that alone doesn't make it gambling. When we associate gambling with investing, some will be quick to dismiss the benefits of owning stocks or other marketable securities. Gambling on sports may be more fun, but it's definitely a more risky use of money than putting it in the stock market. In the long run, investors have the chance to make more money because there. The Finance 202: The stock market is betting on a Biden victory with Brent D. Griffiths Stock market investors believe Joe Biden is going to win the presidency, and they're betting with their.

Think investing is the same as gambling or scratching off a lottery ticket?

Many people are nervous about putting their money in the market and hesitate because they believe that investing has more to do with luck than anything else.

Taxi casino de montreal. In other words, they believe their ability to earn a return on their investment comes down to pure chance—like the flip of a card or roll of the dice. Investors and gamblers do have one thing in common: They both want to put more money in their pockets.

Casino Gambling Vs Stock Market

Investing vs. gambling

Investing and gambling could not be more different.

Here's why investing your money is typically a better option for those looking to increase their wealth, rather than buying a lottery ticket, or going all-in with a pair of jacks:

The odds are in your favor

Anyone familiar with gambling has likely heard the phrase 'the house always wins.' Since casinos are in the business of making money for themselves, that means the scales are tipped in favor of the dealers.

Investing is generally a much more effective way of making your money work for you. And most importantly, investors have a lot more control in where your money goes and how it can grow.

Gamblers hope for a quick win. Investors want to build wealth over time

For example, if you bet $1,000 that the roulette wheel hits your lucky number, you've got one shot at cashing in. Your odds? 35 to one. That's a risky bet. And there's a good chance you'll walk away from the casino with less money than when you walked in.

Understanding risk

Investing involves risk. But by building a diversified portfolio with stocks, bonds, and holdings from multiple sectors (tech, energy, etc.), you can balance out your risk. In other words, you're not betting it all on one investment—or putting all of your eggs in one basket.

If one investment goes down in value, you'll have other investments that may hold steady, and keep your portfolio afloat.

For example, numerous advisers say an effective way to manage your money is by applying aspects of Modern Portfolio Theory (MPT). Nobel Prize-winning economist Dr. Harry Markowitz conceived the idea for MPT which formed the foundation for portfolio management by balancing risk and return.

The general idea of MPT is that by investing in a diverse assortment of stocks, bonds, and other securities in a multitude of countries, you can minimize risk.

Invest with a plan

Sports Betting Or Stock Market

You've probably seen news reports about people who win a lot of money at the casino or by playing the lottery. These make it seem like a lottery win is not only possible but probable. Unfortunately, it's not. Losing is nearly inevitable when you gamble.

Gamblers hope for a quick win. Investors want to build wealth over time. Fast money sounds great but it isn't an actual plan to get you to your goals.

Rather than just 'win big,' many investors have a specific plan as to what they're investing for in the long term. This goal, whether it's saving for a down payment or a child's college education, should align with your investment strategy.

Once you have a plan in place, you can adjust your portfolio according to your timeline.

The power of compounding

By choosing to invest your money with a solid strategy you can allow your assets opportunity to compound over time.

Here's how compounding works:

Say you start putting away $50 a week in an investment account that owns a variety of stocks, bonds, and cash. If that account earns an average of 5% annually, you'll have over $159,669 in 30 years when the interest is compounded annually.

Podcast: Play in new window | Download

LISTEN (mp3audio) (5:45 min)

Right before the 2010 Super Bowl, a page 1 article in the February 5, 2010 Wall Street Journal opened with this sentence:

'Investors are sometimes accused of treating the stock market like a casino. Now, one Wall Street firm wants to treat casinos like the stock market.'

The article details the decision of a Wall Street bond-trading company to take over the management of sports betting at a new Las Vegas casino. Lee Amaitis, the company executive who runs the betting operation, says the firm got into sports gambling because 'we wanted to turn gamblers into traders.' Using sophisticated financial-markets software, bettors can not only bet on the final outcome, but also make wagers on events during the game, such as whether the next pass might be completed, or who kicks next field goal.

On several occasions, the article noted similarities between investing and gambling. The article even featured a bond trader-turned-professional gambler who said 'Wall Street is just a form of legalized gambling.'

Is investing just a form of gambling? For many investors, the answer may be 'yes.' But it doesn't have to be. And it probably shouldn't be.

In July 2000, Tom Murkco, the CEO of Investor-Guide.com, published an essay titled 'What is the difference between gambling and investing?' While Murkco noted that many aspects of gambling and investing might appear similar, there were several distinct and easily defined differences.

For either investing or gambling, the beginning of Murkco's definition is the same: An activity in which money is put at risk for the purpose of making a profit.

Sports Betting Vs Stock Market

But while the purpose of gambling and investing is identical, the methods by which the purposes are achieved are drastically different.
Here are Murkco's distinctions:

Sports Gambling Vs Stock Market

When someone invests…

• sufficient research has been conducted;
• the odds are favorable;
• the behavior is risk-averse;
• a systematic approach is being taken;
• emotions such as greed and fear play no role;
• the activity is ongoing and done as part of a
• long-term plan;
• the activity is not motivated solely by entertainment or compulsion;
• ownership of something tangible is involved;
• a net positive economic effect results.'

When someone gambles…

• little or no research has been conducted;
• the odds are unfavorable;
• the behavior is risk-seeking;
• an unsystematic approach is being taken;
• emotions such as greed and fear play a role;
• the activity is a discrete event or series of discrete events not done as part of a long-term plan;
• the activity is significantly motivated by entertainment or compulsion;
• ownership of something tangible is not involved;
• no net economic effect results.

When defined this way, it's easy to see the differences between investing and gambling. It's also easy to see that because of the methods some people use to invest, their behavior may more closely resemble gambling.

For example, industry studies have repeatedly shown that the behavior of mutual fund investors often accounts for poor investment performance. Because they don't approach investing systematically, emotions like greed and fear may cause people to make impulsive decisions, with little or no research. Not surprisingly, the results from these methods more often resemble the returns from lottery tickets.

Not Gambling with Your Investments: Easier said than done?
In his book, Snap Judgment: When to Trust Your Instincts, When to Ignore Them, and How to Avoid Making Big Mistakes With Your Money,author David Adler says it's the psychological component of investing that is the most difficult to manage. Adler contends that behavioral research shows many individuals have an almost over-whelming set of hard-wired dispositions to take gambles rather than make investments. Adler quotes Andrew Lo, an MIT professor of finance:

'The same neural circuitry that responds to cocaine, food, and sex has been shown to be activated by monetary gain as well.'

Taxi casino de montreal. In other words, they believe their ability to earn a return on their investment comes down to pure chance—like the flip of a card or roll of the dice. Investors and gamblers do have one thing in common: They both want to put more money in their pockets.

Casino Gambling Vs Stock Market

Investing vs. gambling

Investing and gambling could not be more different.

Here's why investing your money is typically a better option for those looking to increase their wealth, rather than buying a lottery ticket, or going all-in with a pair of jacks:

The odds are in your favor

Anyone familiar with gambling has likely heard the phrase 'the house always wins.' Since casinos are in the business of making money for themselves, that means the scales are tipped in favor of the dealers.

Investing is generally a much more effective way of making your money work for you. And most importantly, investors have a lot more control in where your money goes and how it can grow.

Gamblers hope for a quick win. Investors want to build wealth over time

For example, if you bet $1,000 that the roulette wheel hits your lucky number, you've got one shot at cashing in. Your odds? 35 to one. That's a risky bet. And there's a good chance you'll walk away from the casino with less money than when you walked in.

Understanding risk

Investing involves risk. But by building a diversified portfolio with stocks, bonds, and holdings from multiple sectors (tech, energy, etc.), you can balance out your risk. In other words, you're not betting it all on one investment—or putting all of your eggs in one basket.

If one investment goes down in value, you'll have other investments that may hold steady, and keep your portfolio afloat.

For example, numerous advisers say an effective way to manage your money is by applying aspects of Modern Portfolio Theory (MPT). Nobel Prize-winning economist Dr. Harry Markowitz conceived the idea for MPT which formed the foundation for portfolio management by balancing risk and return.

The general idea of MPT is that by investing in a diverse assortment of stocks, bonds, and other securities in a multitude of countries, you can minimize risk.

Invest with a plan

Sports Betting Or Stock Market

You've probably seen news reports about people who win a lot of money at the casino or by playing the lottery. These make it seem like a lottery win is not only possible but probable. Unfortunately, it's not. Losing is nearly inevitable when you gamble.

Gamblers hope for a quick win. Investors want to build wealth over time. Fast money sounds great but it isn't an actual plan to get you to your goals.

Rather than just 'win big,' many investors have a specific plan as to what they're investing for in the long term. This goal, whether it's saving for a down payment or a child's college education, should align with your investment strategy.

Once you have a plan in place, you can adjust your portfolio according to your timeline.

The power of compounding

By choosing to invest your money with a solid strategy you can allow your assets opportunity to compound over time.

Here's how compounding works:

Say you start putting away $50 a week in an investment account that owns a variety of stocks, bonds, and cash. If that account earns an average of 5% annually, you'll have over $159,669 in 30 years when the interest is compounded annually.

Podcast: Play in new window | Download

LISTEN (mp3audio) (5:45 min)

Right before the 2010 Super Bowl, a page 1 article in the February 5, 2010 Wall Street Journal opened with this sentence:

'Investors are sometimes accused of treating the stock market like a casino. Now, one Wall Street firm wants to treat casinos like the stock market.'

The article details the decision of a Wall Street bond-trading company to take over the management of sports betting at a new Las Vegas casino. Lee Amaitis, the company executive who runs the betting operation, says the firm got into sports gambling because 'we wanted to turn gamblers into traders.' Using sophisticated financial-markets software, bettors can not only bet on the final outcome, but also make wagers on events during the game, such as whether the next pass might be completed, or who kicks next field goal.

On several occasions, the article noted similarities between investing and gambling. The article even featured a bond trader-turned-professional gambler who said 'Wall Street is just a form of legalized gambling.'

Is investing just a form of gambling? For many investors, the answer may be 'yes.' But it doesn't have to be. And it probably shouldn't be.

In July 2000, Tom Murkco, the CEO of Investor-Guide.com, published an essay titled 'What is the difference between gambling and investing?' While Murkco noted that many aspects of gambling and investing might appear similar, there were several distinct and easily defined differences.

For either investing or gambling, the beginning of Murkco's definition is the same: An activity in which money is put at risk for the purpose of making a profit.

Sports Betting Vs Stock Market

But while the purpose of gambling and investing is identical, the methods by which the purposes are achieved are drastically different.
Here are Murkco's distinctions:

Sports Gambling Vs Stock Market

When someone invests…

• sufficient research has been conducted;
• the odds are favorable;
• the behavior is risk-averse;
• a systematic approach is being taken;
• emotions such as greed and fear play no role;
• the activity is ongoing and done as part of a
• long-term plan;
• the activity is not motivated solely by entertainment or compulsion;
• ownership of something tangible is involved;
• a net positive economic effect results.'

When someone gambles…

• little or no research has been conducted;
• the odds are unfavorable;
• the behavior is risk-seeking;
• an unsystematic approach is being taken;
• emotions such as greed and fear play a role;
• the activity is a discrete event or series of discrete events not done as part of a long-term plan;
• the activity is significantly motivated by entertainment or compulsion;
• ownership of something tangible is not involved;
• no net economic effect results.

When defined this way, it's easy to see the differences between investing and gambling. It's also easy to see that because of the methods some people use to invest, their behavior may more closely resemble gambling.

For example, industry studies have repeatedly shown that the behavior of mutual fund investors often accounts for poor investment performance. Because they don't approach investing systematically, emotions like greed and fear may cause people to make impulsive decisions, with little or no research. Not surprisingly, the results from these methods more often resemble the returns from lottery tickets.

Not Gambling with Your Investments: Easier said than done?
In his book, Snap Judgment: When to Trust Your Instincts, When to Ignore Them, and How to Avoid Making Big Mistakes With Your Money,author David Adler says it's the psychological component of investing that is the most difficult to manage. Adler contends that behavioral research shows many individuals have an almost over-whelming set of hard-wired dispositions to take gambles rather than make investments. Adler quotes Andrew Lo, an MIT professor of finance:

'The same neural circuitry that responds to cocaine, food, and sex has been shown to be activated by monetary gain as well.'

For some people, the thrill of investing/gambling can be addictive. But when the stakes are one's financial future or retirement, or your children's college education, the need for a thrill shouldn't come by jeopardizing one's investments.

This imperative to not compromise investing by gambling highlights one of the greatest benefits of working with a team of financial professionals: Besides receiving informed advice, a financial professional can often serve as a protection against gambling with your investments, by encouraging you to make sound decisions based on good research that have a high likelihood of success.

Take a moment to consider the last few major financial decisions you've made in the past year. Then look at the list above. Did you make an investment or take a gamble?