Why investing isn't gambling

You may have heard the cynical saying that the stock market is the world’s biggest casino. It implies that there’s no such thing as being a successful investor: it’s all just the luck of the cards. It also summons up the idea that “the house always wins” and while you might get lucky for a brief period of time, over the long-term you’ll lose more than you’ve won, and probably your initial capital as well. But neither of these is true for investing.
Why do some of us have this impression? Well, over and above the human need to simplify ideas into bumper stickers, it also relates to the influx of individuals investing directly into stock markets, often with little knowledge or expertise, and simply chasing prices. They’re basically betting that a stock will continue going up, or going down, depending on the circumstances, with no understanding of the company they’re investing in. They see a trend and try to jump on it before it’s too late. At best, this is speculation, not investing.

Full article: https://www.mandg.co.za/insights/articlesreleases/why-investing-isn-t-gambling/

April 19 2023 By M&G Investments