This question is one of the most common questions among people that are involved in both gambling and investing world. There is a great number of individuals that consider investing and gambling really similar things, which in fact isn’t true and there are some crucial differences between these two terms that you should know. Another important thing that you should ask yourself when it comes to the investing your money in a stock market, are you gambling or investing., Investing will be when you make smart decisions that are based on previous research, you may also contact your financial adviser to help you with the decision. So if you do it this day and you previously do some profound research before you invest your money, that you are most likely to gain a profit and you are not gambling your money. If you are impulsively investing your money, without any previous research that in fact, you are not investing, and you are gambling.
Investing and Gambling Definitions
In order to answer a question what is better gambling or investing, we first have to understand both meanings. So investing by commonly accepted definition is any act of committing capital or money to some endeavor when there is a certain expectation of obtaining some additional profit or income. So this investment definition, in fact, tells us what is the main difference between gambling and investing. If we look from this perspective, the greatest difference between these two terms is the lack of previous research when it comes to the gambling. However many people still think that playing games at a casino and investing your money in a stock market is almost a same thing. These people I fact do little or no research at all so when they invest in a stock market, they are most likely to lose. We said that research is on one of the crucial steps towards a significant investment, so if there is no any research you will most likely fail.
Other difference between investing and gambling your money is that gambling, in fact, involves completely random chance. So investing requires research, but to be clear this research doesn’t have to necessarily be an utterly profound and it most certainly doesn’t need a Ph.D. so don’t get intimated at the very beginning. In fact, investment research in most cases can be greatly done in short amount of time, so you don’t have to worry that you will spend that great amount of time just on research.
Investing in a Company
When you are investing, you, in fact, own that share that you purchased, and in a long-term, there is a great potential for doubling your money. On the other hand when you walk into a casino and place bets on roulette table or poker, you are really giving away your money, so in fact, you don’t win anything at that point. Further, if you are lucky you can get some profit, but odd are mostly against you since there is a casino advantage that is almost same in every casino. While you are gambling, odd are against you, and your potential future profit is based on chance. On the other hand when you invest your money in some company, for instance, you own that company’s shares, and your further research can make a great difference between failure and success.
If you are thinking of investing in a company, you should first look into recent company reports. Also pay attention to other company information like last annual reports balance sheet, income statements, cash flow statements and other relevant staff. You also can call that certain company and ask questions that are relevant to you. So before you invest make sure that you know these relevant things in order to make a wise investment decision. You also should look at some evaluation comparisons regarding a stock market to historical norms and industry peers. So unlike pulling the handle while playing a slot machine, when it comes to a stock market, just a little bit of research can significantly increase your odds of making a great profit. Therefore we can conclude that investing your money is way wiser than gambling. If you experience some difficulties at the beginning of your investing journey, don’t be discouraged since a stock market is significantly fluctuating, and you will most likely see positive results in a long-term. There is no investor who is constantly doing great at a stock market, and there is no person that is born market timer. Everyone who is involved in a stock market does great research, and the y further attempt to pay some fair valuations that are based on their own assumptions. We suggest you focus on a company that you are thinking about investing and ignore the market. Do your research right, and you can expect the best.