Although some would refer to the stock market as a gambling place, it is actually an economic wheel that creates wealth for people that either trade or invest properly. Most people tend to avoid taking risks with their money, but there is also another side of people, the ones who risk everything to win. However you way you look at it, stock gambling is a “sport” involving comparing situations and possibilities and taking the chance of being right more often than not.
Winning in the stock market relies on the principles of good investing while dealing with fluctuating markets. Similar to gambling, it is difficult to calculate risk when it comes to the market MEGAGAME. Predictable methods of investing are difficult to find because the markets can change at any time based on many factors that influence stock prices.
The major difference between stock gambling and buying stocks is that when you gamble, you are simply looking for a way to earn money without any particular understanding of the companies you are investing in. Buying stock after doing fundamental research is investing rather than gambling because you are looking at the company or stock in terms of its future state rather than the here and now.
It is often advised that you have a diverse portfolio of stocks. But you should also know these stocks well, because you need to know what you own if you plan on winning. With a little effort you can advance from blindly stock gambling to investing with some confidence that the odds of success will be in your favor. You will definitely have periods of losses, either due to unpredictable market events, or a few bad portfolio choices. This is natural and should not deter you from investing in stocks.
The idea of stock gambling is really more of a myth because the real essence of stock investing is not playing a guessing game. The markets, though unreliable at times, do have economic indicators that can show you when things are going up or down. Pay attention to these economic indicators and market imbalances over the long term and you will be able to time your investments with more accuracy. You will also be able to select the stocks or market sectors that are most likely to profit from any economic situation.
The real key to winning as an investor and avoiding stock gambling is calculated timing. In this sense it’s similar to a game of chess where experience and foresight pay off in the long run.
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