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Is Investing Gambling?

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Is Investing Gambling?

Postby 58gambling » Sun Jun 26, 2016 7:28 pm

I have not done well in my investment life. When I first started investing in my 20's and newly married, I put $10,000 into the hands of a "Certified FInancial Planner"....He allocated the money into several different funds; a couple of mutual funds and one "oil-income limited partnership"....well, long story short after some years the $10,000 became $6,000 and I got discouraged and pulled the money out.
Flash forward about 20 years and I forget what year was the great recession but most of us lost 33-50% of our retirement funds in the stock market. When the market price of my townhome was at its highest, I was tempted to sell, but didn't because some realtor said, "why would you want to sell something which is appreciating 8% a year? Of course, immediately thereafter, the housing bubble burst and my home lost about 40% of its prior value. I know many people don't consider investing in the stock market or mutual funds gambling, but the fact is, no matter how much research and how many prospectuses you look at, you can lose your money. Heck, sometimes I think horseplayers who study racing forms are like investors doing research, but it's all still a crapshoot. Do you disagree?
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Re: Is Investing Gambling?

Postby Aries411 » Sun Jun 26, 2016 8:58 pm

I think investing involves a long term plan and in the long run your investment should appreciate (you can look at the ANDEX chart). Your investment could decrease, but generally it should increase. I consider mutual funds investing because you usually keep them for many years, but people who sells stocks over the short term, especially day traders, are gamblers in my opinion. Yes, it does involve a lot of financial knowledge and understanding of the economy but because of the short term and the uncertainty, I consider it gambling. They are constantly looking at the numbers (just like gamblers) and when they find a good buy (their 'bet'), they will purchase it and sell it soon after. If you how stocks for long periods of time, I do not consider it gambling. I guess how long you keep your investments determine if its gambling or not..
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Re: Is Investing Gambling?

Postby petemon » Mon Jun 27, 2016 12:47 am

Ditto to Aries411's post

It's all about time frame and the type of investments

Putting money in a mix of blue chip stocks and bonds each paycheck for the long-term is certainly not gambling. First, putting in a bit at a time instead of a lump-sum reduces the risk because you are buying shares at different prices over time. Second, yes, even blue-chip stocks can have a terrible year or two, but you only lose if you sell. If you just stay put, history is on your side and you will almost certainly experience a rebound.

Short-term trading in stocks or derivatives is gambling .....and I believe one of the U.S. Democratic Presidential candidates proposed putting an extra tax on these types of transactions. I also consider buying on margin to be gambling (buying a position in something with borrowed funds)

It's an interesting topic, but as long as you are well-diversified, hold for the long-term, and don't try to time the market, one should average 3-6% growth over time. Yes, it's boring, but this is why it's not gambling :)
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Re: Is Investing Gambling?

Postby uskat » Tue Jun 28, 2016 8:25 pm

many options/ stock people in my local GA

something for to watch w/ my "dispostion/addiction"
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