Quote:
Originally Posted by PaceAdvantage
It's all gambling. Some bets (investments) are sounder (ie. LESS RISKY) than others, but it's all gambling, because there are no guaranteed returns. There are close to guaranteed returns, like a savings account, but you see what those are paying these days. Hardly worth it.
PLENTY of people have lost EVERYTHING investing...there have been TONS of S&P pit traders (when that existed) who have lost it all. There have been TONS of day traders that have lost it all.
There have been people who "invested" in places like Enron who have lost it all...even pension funds and the like, who were supposedly "safe."
MONEY IS AT RISK in all of these situations...that's gambling.
If there were no risk, there would be no return.
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The difference is that gambling in a casino involves cycling your money through a game that is designed to hold some percentage of that wager for the house. Even if it’s a fraction of 1%, over the long run you should lose money.
Investing involves owning a limited liability interest in a (hopefully) money making enterprise. You can certainly screw that up any number of ways but looking at historical returns on equities, it’s much, much harder for someone who buys and holds through a market cycle to lose money than it is for anyone to win in a casino.
If you want to compare investing to gambling, at least recognize the distinction that it’s gambling in a form that has a positive return for those who play built in. It takes some serious effort to lose everything in the market. The minimal effort of diversifying across just a few holdings mitigates that possibility to near zero.