by Allen Teal

Created on: November 15, 2011   Last Updated: November 16, 2011

Want to get rich in the stock market? Everyone does. Just go out and buy a little of this and a little of that and wait for the cash to pile up. This sounds too good to be true, and it is. People do make money in the stock market. Some even make a lot of money. However, most people do not make piles of cash from investing in stocks. Because playing the stock market carries high risk with a low chance of making money, it can be considered a form of gambling.

Gambling is when you have an investment that is far below the desired return.

Using a candy bar machine is not gambling. You put in the cost of the candy. Press the right buttons and out drops a product. You are a winner every time unless the machine malfunctions. Slot machines are a form of gambling. You put in a small amount of money and hope to get thousands of dollars back. However, the odds of you winning a significant amount of money are minute.

When investors put significant cash into the stock market hoping for a quick profit, they are gambling.

Unless they are inside traders, the odds of getting a large return back are small. The stocks with the greatest potential to return large profits are also the ones that are most likely to go bankrupt. This means that you not only fail to earn a profit, but you lose your entire investment. With penny stocks, you have a much higher risk of loss than you do to see gains.

With stocks of any type, you have no protection for your investment.

When you buy stocks, your money is out of your control. No one has guaranteed you a return of so many percent over a set period of time. To have any chance of success in the market, you have to be a constant player. You either have to monitor your stocks almost daily or pay someone else to do it for you. While you do a little of this with a bank, you do have a realistic expectation of being paid a reasonable interest rate based on prevailing rates.

The stock market needs losers in order to survive.

Those who make significant money in stocks receive their increases on the backs of the money losers in the market. If they can persuade you to buy an attractive stock at a high price, you will lose money while they take their winnings to the bank. It is a lot like poker whereby a skilled player entices another player to bet high on a mediocre hand and then walks away with a huge pot. In the same way, many inexperienced stock players sell when they fear a loss.

Profit seekers scoop up these stocks at the low ebb and ride them back to the top before selling. It is a lot like the bluff in poker where the experienced player scares the lesser player away from the pot even though the lesser player has the better hand. Either way, the inexperienced gambler loses a bundle.

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