Best of the Week
Most Popular
1.The Trump Reset, US Empire's Coming Economic, Cyber and Military War With China (2/2) - Nadeem_Walayat
2.Now Is the Time to Buy Gold - 5th Jan 17 - John Grandits
3.CIA Planning Rogue President Donald Trump Assassination? Elites "Manchurian Candidate" Plan B - Nadeem_Walayat
4.The Trump Reset - Regime Change, Russia the Over Hyped Fake News SuperPower (Part1) - Nadeem_Walayat
5.Most Popular Financial Markets Analysis of 2016 - Stock Market Crash Postponed Again - Nadeem_Walayat
6.No UK House Prices Brexit Crash 2016 Despite London Weakness, Forecast 2017 - Nadeem_Walayat
7.President Trump Understands the NSA, CIA... LIE, America's Intelligence Agencies Crime Syndicate! -Nadeem_Walayat
8.President Donald Trump's 2017 New Year Message, BBC Fake News, Was 2016 a Dream? - Nadeem_Walayat
9.Major Stocks Bear Market Still Looms - Zeal_LLC
10.Biased 2017 Forecasts - Debt, Housing and Stock Market (1/2) - James_Quinn
Last 7 days
Returning Gold Bulls - 18th Jan 17
Biotech Breakthrough Could Create A $11.4 Trillion Opportunity - 18th Jan 17
Bitcoin and Gold - Outlook, Volatility and Safe Haven Diversification - 17th Jan 17
Stock Market Uptrend on Borrowed Time - 17th Jan 17
The One Stock to Retire On - 17th Jan 17
Trump anti-Communist Counter Revolution - 17th Jan 17
US Stock Market Update as the Trump Inauguration Approaches - 17th Jan 17
The American Crisis - Common Sense 2017 - 17th Jan 17
Obama Leaves, Hope Arrives, Will Stupid Stay? - 17th Jan 17
Damage Inflicted by Precious Metals Manipulation Is in the “Multi Billions” - Keith Neumeyer - 17th Jan 17
Gold Price Forecast 2017 Update - Video - 17th Jan 17
The Story of the U.S. Regime Change Plan in the Philippines - 16th Jan 17
Gold Price 2017 Trending Towards $1375 as Forecast - 16th Jan 17
'Deep State' CIA Director States We are Not NAZI's, Warns Trump Does Not Understand Russian Threat - 15th Jan 17
UK House Prices Forecast 2017 - Crash or Bull Market? - Video - 15th Jan 17
SPX Stocks Bull Market Update - 14th Jan 17
President Trump vs the Deep State that Hides in Plain Sight - 14th Jan 17
The Impact of Sir Alex Ferguson's Retirement on Man United's Share Price - 14th Jan 17
What Can Stock Market Tell You About Politics? - 13th Jan 17
Big Gold Buying Coming 2017 - 13th Jan 17
A Bullish Case for Gold 2017 - 13th Jan 17
Will Stocks Bull Market Continue to Charge or is it Time to Sell the News - 13th Jan 17
Gold and Silver Off To Shining Start to 2017 - 13th Jan 17
Gold’s Fundamental Outlook for 2017 - 13th Jan 17
Is trading stocks and shares just as luck-based as roulette? - 13th Jan 17
Trump CIA Like Nazi Germany - Fake MI6 Intelligence leaked to Fake News Mainstream Media - 13th Jan 17
USD in Decline. SPX and TNX May Follow - 12th Jan 17
CIA War On Trump - Leaks Fake MI6 Intelligence to Fake News Broadcast Media - 12th Jan 17
Registered Address.co.uk London Business Registered Office Address Mail Forwarding Review - 11th Jan 17
13 Contrarian Economic Predictions For 2017 - 11th Jan 17
10 Potential Black Swans and Opportunities for the US Economy in 2017 - 11th Jan 17
How to Get a Bird of Paradise Plant to Flower - UK Growing Video - 11th Jan 17
The No.1 Energy Stock To Buy Right Now - 10th Jan 17

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

What Can Stock Market Tell You About Politics?

Stock markets – the similarities between investment, and online gambling

Stock-Markets / Stock Market 2017 Jan 06, 2017 - 03:51 PM GMT

By: Submissions

Stock-Markets

'Investing in the stock market is exactly the same as betting online'. This is a statement that you're likely to here when discussing investing with people who are not particularly savvy where the financial marketplace is concerned.

In many instances investing your money in something in which you have no control over the outcome could be considered gambling. So, how much truth is there in the theory that investing and gambling are essentially the same thing? And if investing is technically gambling, then is it closer to the luck of a casino, or a more methodical sportsbook approach?


What is the stock market?
The stock market is the market in which shares of publicly held companies are issued and traded. The stock market plays an important role in the global economy as it provides a simple platform that allows companies to create capital. This capital is generated by selling shares (part-ownership) of a business for cash.

The stock market gives investors the opportunity to turn a small amount of capital into a larger amount of wealth via investing. Trading on the stock market is often seen as a much less risky way of creating wealth as opposed to say, setting up your own business.

Online gambling in modern society
Online gambling is something that is now engrained, and accepted in modern society. Everywhere you look you'll see adverts and promotions for major bookmakers, all of which allow you to place bets online.

There are a multitude of platforms and markets when it comes to online gambling allowing you to bet on things such as sports, casino and bingo. The online gambling market is seemingly so popular as it's perceived as an easy way to make a quick win; even without extensive knowledge and research.

Similarities between investment and online gambling
Risk - Investing and gambling both involve a huge amount of risk and choice. First and foremost, both the gambler and the investor must decide how much they want, and can afford to risk.  They then must make a choice on where they would like to risk their capital.
Gaining an edge - Both investors and gamblers are constantly looking for an edge in order to help enhance their performance and therefore maximise their profits. It's possible in both cases to gain an edge by studying the behaviour of the markets and analysing the possible factors that may affect outcomes.

The differences
The concept of time - Gambling is a time-bound event while an investment in a company can last several years. With gambling, once the event is over, your opportunity to generate profit from your bet has come and gone; you either have won or lost. With stock investing, on the other hand, time can be rewarding. Some companies pay dividends to their investors, meaning that they are rewarded for their risked capital.

Throwing it in the pot - With online gambling, once you place your stake, that's it; it's submitted and you will either win or lose that stake. When betting on sports, (or taking part in most other online gambling activity) there is no loss mitigation strategy. However, when it comes to investing on the stock market there is a variety of loss mitigation options. Setting stop losses on investments is commonly used to avoid undue risk.

Stop losses: If your stock drops 5% below the price it was purchased for, you have the opportunity to sell that stock and still retain 95% of your risk capital.





This is an paid advertorial. This is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any investing and trading activities.


© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife