Many skeptics, and legions of people who have never invested before, regard investing as just another form of gambling. This widely-held, but misinformed view, has kept too many from enjoying the financial rewards of judicious investment in the United States economy, which generally, over the long run, has been profitable.

Although there may be some superficial similarities between the two concepts, a strict definition of both terms - investing and gambling - reveals the principle differences between them.

A standard dictionary defines "invest," as follows: The same dictionary defines "gamble" as follows: To play at any game of chance for stakes. To stake or risk money, or anything of value, on the outcome of something involving chance; bet; wager. The 5 Biggest Stock Market Myths Gambling While the above definitions may seem similar, the realities are not the same. In casino gambling, the "house," or the casino, has a mathematical advantage over the gambler, the player.

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Odds are that in the long run, the gambler will lose. Below, as examples, are odds against the players for some of the more popular casino games of chance. Odds may vary slightly from casino to casino, and during promotional initiatives; but generally these odds apply, and reflect the player's disadvantage when playing these games. Data compiled on the stock market and on Treasury Bill three-month U. Residential real estate, principally existing homes, similarly appreciated in value over the long term.

According to the National Association of Realtorson average, the price of existing homes increased by 5. The Bottom Line So, when skeptics tell you investing is merely gambling by another name, refer them to the data.

The data clearly shows that gambling is a no-win venture, and not at all comparable to investing. The data also shows that the major areas of investment - a diversified stock market portfoliotriple-A bonds and residential real estate - have been profitable over time.

Certainly some investments may not work out, and some may even prove disastrous; but which would you prefer, to invest your life savings or retirement fund in a diversified investment portfolio or let it all ride at the roulette or blackjack table?

Dictionary Term Of The Day. A measure of what it costs an investment company to operate a mutual fund. Latest Videos PeerStreet Offers New Way to Bet on Housing New to Buying Bitcoin? This Mistake Could Cost You Guides Stock Basics Economics Basics Options Basics Exam Prep Series 7 Exam CFA Level 1 Series 65 Exam. Sophisticated content for financial advisors around investment strategies, industry trends, and advisor education.

Sports betting vs. the stock market: Which is riskier? - Aug. 31,

Where Is Your Money Safer? By Marc Davis Share. Caribbean Stud Poker 5. In sports betting and betting on horse racing, the odds are similarly stacked against the bettor. Wagering on horses is actually a bet against other bettors, because odds are determined by the amount of money bet on each horse.

After taxes and the profit to the race track are deducted from the amount bet on the winning horses — the first, second and third finishers in the race — the remaining money is stock market wagering among the people who bet on these horses.

But the favorite in each race only wins on an average one-third of the time. In sports betting, a bettor has to put up an additional amount of money beyond the amount bet, which is kept by the "house. The so-called "point spread," the number of points a bettor has to give in any game — baseball, basketball, football, hockey, etc. Even if a bettor wagers on a winning team, if the team does not win by more points given by the bettor, the bet is a loss for the player.

Based on the facts cited above, gambling in general seems like a bad bet, and the gambler is at a disadvantage no matter how smart. Luck, the X-factor, may favor the gambler for a single bet or for a long, but ultimately temporary, run; luck is fickle and unpredictable. Now, let's look at investing and how it differs from forex tribe gbp usd. Investing When you gamble, you own nothing.

When you invest in a stock, or a stock index fundyou own a share of the company or companies in which you invested. If the company is profitable and issues dividendsyou benefit financially.

If the price of the stock or stocks you own goes up, you can sell at a profit. Although the stock market has fluctuated up and down over the decades, the general trend has been up.

Buy-and-hold stock market investors, therefore, have been rewarded with profits SEE: Volatility's Impact On Market Returns Investors in highly-rated corporate or guaranteed U. Well-chosen real estate investments, mainly residential housing, have also appreciated in value.

So, despite periodic highs and lows, the stock market, U. Nevertheless, any smart financial advisor will tell you stock market wagering past performance is no guarantee of future performance. The trend, however, is apparent — investments in stocks, bonds and alpari forex trading platform download estate, if held long term, usually pay off.

However, a diversified portfolio is the key element.

A mix of various investment products will protect the hsbc stock price hk against a downturn in one or more sectors of the economy.

Let's look at stock market data over a year period from to The numbers show that market increases far outweigh declines. We break down the odds associated with casino games. Which game do you think offers the best chance at winning? Gambling is never a reliable source of supplementary income. Read on to find out why. What are the most commonly followed spread-betting strategies in countries where it's legal?

We look at ways in which gambling creeps into trading and what may drive an individual to trade - or gamble - in the first place.

Investing on Wall Street and gambling on The Strip are not as different as they may seem. Arbitrage betting is a method or system for exploiting differences in odds for profit. Betting odds are expressed in three popular formats: Fractional BritishDecimal European and American Moneyline.

So, if you are planning to enter the betting or the gambling world, it The temptation and perils of being over leveraged is a major pitfall of spread betting. However, the low capital outlay necessary, risk management tools available and tax benefits make spread Spread betting is a speculative practice that began in the s as a way for gamblers to win money on changes in the line of sporting events.

But bythe phenomenon trickled into the financial Spread betting lets speculators trade on price movements. Investors predict whether the spread between the bid price and the ask price will rise or fall. Learn about financial spread betting, the risks involved with spread betting and the dangers of placing financial spread Learn about speculation and gambling, examples of speculation and gambling, and the main difference between a speculator Travel to Vegas and try to win big at the casino; but before you do, make sure you understand the tax laws that govern gambling Learn how financial spread betting is done, and see examples of some of the ways that investors can use spread betting as Learn about the basics of investing in spread betting and how investors protect investments from loss when using this risky An expense ratio is determined through an annual A hybrid of debt and equity financing that is typically used to finance the expansion of existing companies.

A period of time in which all factors of production and costs are variable. In the long run, firms are able to adjust all A legal agreement created by the courts between two parties who did not have a previous obligation to each other.

A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. A statistical technique used to measure and quantify the level of financial risk within a firm or investment portfolio over No thanks, I prefer not making money.

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