Do you think gambling in the stock market pays off? Only if you consider stock market trading as fun and you are prepared to pay for fun.
I never really understood gambling and betting. The odds are always against you and you can consider the game rigged. Instead of swimming with the stream, you make it harder to yourself and swim against it. Playing or gambling against the odds in a rigged game is taking unnecessary risk and never pays off in the long run.
There’s a mountain of research and evidence that proves untrained frequent traders consistently lose money. In fact, such research indicates 95% of all trading-related activity in the market results in losses.
The marketing machine and “Wolves” of Wall Street convince Joe Average that he only needs a computer/smart phone, brokerage account and access to a flashy website to make millions. But for me, this is not sophisticated investing, rather gambling and hoping.
The odds of winning are about the same as those in playing blackjack or any other game in a casino or machine. In almost all cases, you lose! At least in the long run.
There is the one or other unskilled trader who wins but how long does it take to lose it all again. And if somebody hits the jackpot there are too many others who don’t and lose a fortune.
Read the facts about gambling in the stock market:
1. Within all income groups, gamblers underperform non-gamblers. It doesn’t matter how much money you have or how much money you make. If you gamble in equities, you’re going to lose.
2. Gamblers don’t care where they gamble to satisfy their appetite and urge to take risks. There are no boundaries. Research on this topic has shown that stock trading activity declined by a significant amount when lotteries were introduced in some areas.
3. Further, when an area is hit with an especially large lottery jackpot, there’s a decrease in trading among small investors.
4. People with high IQs hold more mutual funds and are more diversified in stocks.
5. People who day trade or think of the market as a casino do not buy mutual funds or have a diversified stock portfolio.
Investing is a serious business of fundamentals, discipline and market wisdom. And not gambling.