by Jeff Gl

Created on: June 22, 2008

Are you an investor or a gambler? I believe nobody likes to be called a gambler but frankly
speaking, very little separates their purported investments from gambling.

Nothing ventured, nothing gain. People invest or gamble with one ulterior motive, that is to make money, but to do that, you have to risk your principal first. There is an enticing Wall Street myth that the only way to reasonably make money and beat inflation is through the stock market. To be sure, opportunities for sky-high profits abound but similarly, stocks can nosedive into the dumps, due to extraneous circumstances. Think of the tech bubble in the late 90s, Black Monday in 1987, and inflation fears of the 1970s.

Let us first look at what constitutes gambling. Whether you are at the casinos or the tracks,
gambling/betting involves purely games of chance. Tossing a dice doesn't require skills and the outcome is based solely on luck. Of course, when you rig the system or have an excellent memory in computing statistics, the odds will shift in your favor.

Professional gamblers make a killing as they are up against other competitors while the house
takes its cut regardless of how the money is distributed among the players. My advice (if you want to keep your shirt), is to get up from the table when you look around and cannot find a fool... that guy is probably you.

1. Gambling As An Entertainment

We tend to look on kindly at our losses from gambling because we treat it as an entertainment or a means of socializing. Besides all the fun and relaxation, we also have different expectations of gambling. With a strike-it-rich mentality, gamblers have no qualms about losing hundreds of dollars to chase the million-dollar jackpot. However, we get all serious and worked up when it comes to losses in investments.

Investing is certainly much slower, doubling your money takes months or years. The money we invested in companies provide an impetus to their expansion plans while we sit back and reap the fruits of their endeavors. When the company reports increasing sales and profits, investors benefit from a return of cash in the form of dividends or a ballooning stock price.

Sadly, due to the accessibility of online trading today, stock market have become a new venue of entertainment and money-making source for gamblers who do not even a basic understanding of what the companies are doing. Brokerages and financial web sites are only too happy to capitalize on such a trend.

2. Investments Can Spur Economy

Investments

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