The traders in the market are really not that different from the gamblers in a casino. In both cases the odds of winning (adding value through betting/trading) are against you, but at least the market lets you participate in its overall growth potential just by being there. Trading, like casino gambling, is a negative-sum-game. According to FanDuel, banks such as JPMorgan Chase, Bank of America, Capital One, Union Bank and Huntington Bank do not allow their debit and credit cards to be used for online gambling. The worry is that these sites can be used for money laundering and fraud, and banks do not want to run into trouble from federal regulators and prosecutors for. At the present time, Macau does not license online gambling operations. Macau, a special administrative region like Hong Kong, is the only place in China where casinos are legal, and the business has grown at an astounding pace since 2001, when the government ended the four-decade gambling monopoly of the Hong Kong billionaire Stanley Ho. Gambling is a straightforward win or lose, and your money will not be worth any more than it was on the day you used it at the casino. Being A Smart Investor If you are serious about investing in the stock market, the first thing to do is to learn how it works. Gambling Market Characteristics. The gambling market consists of sales of gambling services and related goods by entities that operate gambling facilities, such as casinos, bingo halls, video gaming terminals, lotteries, and off-track sports betting.
Afew weeks ago, I was visiting my happy place–the Jersey shore. It was an especiallygood weekend because my best bud, O-man, was in town for his yearly, week-long visithome. Currently, he lives in D.C. and life is busy. So, we don’t get to seeeach other that often. Needless to say, we try to make up for it when we do gettogether.
Friday night rolled around and we decided to head to one of our old stomping grounds–Atlantic City. We had a nice dinner at the Hard Rock Casino and enjoyed my favorite college cover band, Kristin and the Noise.
As we were weaving in and out of the casino floor, I observed all the people gambling. I saw people jump up and down in jubilation and others curse their bad luck. This got me thinking. Is this what my clients feel like? Do they also feel these extreme emotions as stock markets go up and down? To some degree, I know they do despite my best efforts. However, they shouldn’t.
Investing in the stock market is actually the opposite of gambling.
Poker hero meaning urban dictionary.
Terminal casino de la selva cuernavaca horarios. “Oh yea? How can you be so confident that it’s not like gambling in Atlantic City?”
Theanswer is multifaceted, but let’s start with the basics. Everyone knows whengambling, the house always wins. The reason is that statistically every game isin their favor. Crazy that we still play these games, but the math still holdstrue. The longer you play any game in AC, the more probable you’ll lose. If youwant to know the best way to win in AC, you quit the second you’re up (if you’reeven that lucky). Everything about casinos attempt to trick you into playinglonger: free drinks, “fake” money chips, no clocks, pumping oxygen into keep you awake, etc.
“But Andrew, this is exactly how I feel when investing in the markets.”
I’m not discrediting anyone’s anxiety when the markets are down and their accounts show a substantial (temporary) loss. The difference here is the chips are stacked in your favor. Unlike gambling, the longer you invest, the better chance you have to succeed. I’ll reference J.P. Morgan’s Guide to the Markets report sourcing Robert Shiller, from J.P. Morgan Asset Management. For perspective, I’ll speak to the U.S. markets referencing the S&P 500. Going back to 1930, if you invested in the S&P 500 and held your investment for one month you would be positive 60% of the time.
“Andrew, that isn’t much better than the casinos.“
You may be partially right, but also partially wrong. For starters, you shouldn’t be investing for only one month to begin with. Couple that with the fact that after one month your investment is up a greater percentage of time over every one month period in almost 90 years.
“I’m not convinced.”
Let’s keep going then, shall we? If you invested in the S&P 500 since 1930 and held that investment for one year, you would have a positive investment…. 75% of the time. Every calendar year you invested in the U.S. markets and held it to the end of the year, a whopping three quarters of the time you are up. Again, I wouldn’t recommend you invest for such a small period of time. That said, it seems like the chips are getting more stacked in your favor, doesn’t it?
Share Market Is Gambling Or Not Working
“What about a 5 year period? How many times would I have been up if I held that same investment for 5 years?”
Letme preface by saying this is roughly the time period you should be thinkingwhen equity investing anyway. Theanswer: 91% of the time you would have been up! Push that to a 10 year holdingperiod and we are talking about 98% of the time. I’ll hammer my point home bysaying if you invested and held for 15 years, it would be 100% of the time.
Share Market Is Gambling Or Not Applicable
Yousee, where most investors go wrong is they get too emotional and loseperspective. In a way, they can no longer see the forest through the trees oncetheir emotions get in the way. I’m here to tell you investing is nothing likecraps, roulette, or black jack. When investing, you are the house and yourchances of winning are completely up to you. Panic and you lose. Play the longgame and you win. It’s that simple.
This is one of the huge benefits of working with a financial planner. They help you build a plan and stick to it. They help put things into perspective and allow you to achieve your destiny, rather than let emotions, or the spin of a wheel, stunt your dreams.
When O-man and I were younger and more naïve, we’d go to Atlantic City like hot shots. We’d play until one of us lost $100. The loser would always have to buy the late night Crown Fried Chicken. I only wish I had future Andrew to guide me. Needless to say, I’d have bought a heck of a lot less Crown Fried Chicken!
In his role as Financial Planner, Andrew forges lifelong relationships with clients. He coaches them through all stages of life and guides them to better achieve their life goals. For more information about Andrew or the other firm partners, Kyle Hill and David Levy, click the link below.
Financial planning and Investmentadvisory services offered through Diversified, LLC, a registered investmentadvisor. Securities offered through Securities Service Network, LLC,Member FINRA, SIPC . Some associates ofDiversified, LLC are registered representatives of Securities Service Network,LLC, a registered broker/dealer, 9729 Cogdill Road, Knoxville, TN 37932. (800)264-5499.