Are You Investing or Gambling?

Image result for image gambling

Few weeks ago, a pop-up notification in my hand phone notifying a news article releasing a group of co-workers won first price of a lottery ticket in a Western country. The news said the winners split the prize among themselves. While remain anonymous, some of the winners reportedly said they will use the money to pay off their mortgages, some said they will fund their children for university education etc. Interestingly, all of them said they will continue with their current job in the same office because they enjoy their work environment and relationship. It looks healthy and admirable.

A simple search on the website has discovered that many offices have such a practice of polling a dollar from each of the employee and use that collection to buy a lottery ticket on a regularly basis. While knowing chances of winning is slim, but there are still many people involve in such practices. Everyone knows chances of winning in any gambling in general are very rare. But there is never lack of gamblers visiting casino every day.  Gambling businesses bloomsome even in time of economy down turn.  

Gambling and Risk

The highest attraction for these customers is the hope of striking the dream of their life time. This “hope” is the main factor that has kept these people involving with their gambling activities. This hope is further nourished and substantiated by little winning here and there. The determinate depravity of all gambling is when this gambling habit becomes addicted and eventually causes economic crisis to individual life and family. 

Image result for image gambling
Hope is the main factor that attract more people involving in gambling

In fact, all kind of businesses or even walks of life, like marriage do involved risk. That’s why some writers describe life is like a game of gamble.  The risk nature of our daily dealing makes people feel that everything we do like gambling. But no one blames anyone involving with “healthy” life or business “gamble.”

Healthy life gamble is a necessity of life progresses. Because without taking risk, our life can never meet improvement.  Furthermore, gamble or risk in life activities will not result in any addiction and causes life entanglement like financial crisis.

Investment and Gamble

There is also a very thin line between gambling and investment with the stock market activities, including mutual fund. Because all stock investment involves risks. In today’s context, the term “investment” has been mostly abused. Someone who goes to casino or buying a lottery ticket will also consider themselves as doing an investment. There are many playing with stock market often call themselves investors but are gamblers all the while. In fact, the biggest casino in the world is not located in Las Vegas but in Wall Street. 

The biggest difference between gambling and investment is perhaps in the effort we are putting into stock market activities. Investment is like any businesses whereby there are a lot of sweat, studies, analysis, experiences, skills involved.

Rational input is also where it divides investment from gambling. Gambling involves only irrational chances by betting. Winning will only come by luck or fortune. It can never be recurring or repeated.  Only when winning can be repeated due to rational involvement that makes investment superior than gambling. 

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Gambling takes crystal ball to predict winning chances

There is also a difference between calculated rational risk and non-calculated, irrational risk. The nature of gambling is non-calculated, irrational risk. It is like a risk of betting between 50-50% chances of winning based on, like horoscope, crystal ball future telling advices.    

Investment in the global businesses via stock market or mutual fund does involve a lot of risk. But are your risks taken rational or irrationally? Were those risks being calculated? If you have gained any profit from investment, can your profiting experience be repeated in the future?

Are you gambling with the stock market or doing proper investment? I guess you are the one who knows the best.

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Disclaimer

The view and opinion expressed are personal views of the author and are subject to change based on market and other conditions.  This write up does not constitute sole advice for investment decision. Investors are advised to do further reading and research to conclude individual decision.

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