We’re going to be talking about the adage on whether investing is a smart idea compared to gambling. Many people say that investing is just as addictive and risky as gambling. However, this is simply not true.
Below, we’ve highlighted some important characteristics which differentiate the two and advise on which is the smarter strategy.
What is Investing?
This is an effective way of growing your capital through spreading your capital over a diversified investment portfolio. The investment portfolio can be made up of anything such as stocks, bonds, equities, gold, and properties. The odds are always favorable in investing.
Long-term investing such as buy-and-hold is like owning a business. The focus is on deferred monetary fruition. With effort and patience, the investor is likely going to build a worthwhile future wealth. By having a diversified portfolio of investments, the potential losses minimize as there are other investments that will make up the shortcomings.
Investing enables the investor to control and lower the risks through constant research. analytical skills, and implementing a planned strategy. Any serious investor will know how to keep emotionally detached from their investments and focus on long-term planning for good profits.
What is Gambling?
Gambling is only for quick and instant monetary fruition. Money is put at risk for a small chance of potential short-term financial gain. However, gambling involves no strategies, little research or any kind of control over the very high risks.
Exceptionally easy for gamblers to become addicted to gambling due to greed, whether done professionally or just for simple entertainment. Examples of gambling activities include sports betting, poker, blackjack, roulette, baccarat, and many others.
Day-trading is very similar to gambling. It involves high risks stock speculation based on short-term changes. A person will invest and as soon as the stocks are favorable, it’s a quick cash in and get out kind of situation. Extremely short-term and no ownership of anything tangible.
Based on the characteristics we’ve highlighted, it would only make sense to go with long-term investing. It’s time-consuming but the odds will always be in your favor.