All life carries some risk. There is a huge difference between managing risk and gambling.
Banks are not gambling when they loan money. They don't loan you money in the HOPE of charging you interest. They charge you interest. They cover their risk by charging people who are a greater risk a higher interest rate. And sometimes, loans are secured by property, which they take if you default on the loan. When they do sometimes take losses on loans, they more than make up for those losses on the interest they collect on good loans, and they mitigate some of those losses by taking and reselling the security for those securitized loans.
Trading in individual stocks is gambling. That is not investing. Investing carries risk, but investing is buying and holding, and in cases where dividends are paid, reinvesting those dividends. Trading is gambling. When you lose money trading individual stocks, you do not have the cushion against losses that a bank has.
EXACTLY LIKE A UNFAIR GAMBLING, BECAUSE THE STOCK DEALER ( THE ISSURER ) CONTROL THE STOCK PRICE UNDER TABLE. THERE ARE TWO GROUPS OF TRADER, BUYER AND SELLER TO SHARE THE STOCK POOL. DEALER IS NOT INVOLVE THIS STOCK GAME TO BUY OR SELL. DEALER ISSUES MORE PAPER STOCK TO LURE BACK MORE REAL MONEY FROM BUYER AT THE BEGINNING. DEALER PUSH UP THE STOCK PRICE THROUGH HIS TRADE BOOKER OR SO CALLED STOCK ANALYST. THAT MAKE BUYER SELLS THE STOCK TO MAKE PROFIT, HE BECOMES THE SELLER. ANOTHER TRADER TAKES THE STOCK BECAUSE HE BELIEVES THE STOCK SHALL GO UP MORE. AS THE STOCK PRICE REACHES ITS TOP, DEALER ANNOUNCES SOME BAD NEWS FROM THIS COMPANY AND CAUSE THE STOCK PRICE FALLING LIKE A ROCK. SO, THE BUYER HOLDS HIGH PRICE STOCK BECOMES THE VICTIM IF HE DUMP ALL HIS STOCK AT LOW MARKET PRICE, BUT HE CAN HOLD THE STOCK WITHOUT SELLING IT AND HOPE ITS PRICE GOES UP AGAIN IN UNKNOWN TIME.
SO, THIS STOCK TRADE GAME HAS A FEW WINNERS WHOM GET PROFIT OUT FROM MORE LOSERS' CONSTRIBUTION THROUGH STOCK TRADE. ONLY THE DEALER IS A SURE WINNER.
I mean this in the nicest way but if you don't understand the very basics of stocks, bonds, investing etc you have no business playing Day Trader or choosing your own investments unless you can truly afford to lose every dime, quickly.
If you buy stock hoping that you can sell it for a quick profit because of the daily (or monthly) swings in price, then you are not investing. That is gambling and on a large scale. You are hoping that for some unknown reason, the trading price will go up instead of down, and that you can outguess the public and sell at the best price.
If you buy and hold stock in a quality company that is earning money, you are not gambling. You are part owner of a money making business and the price of the stock goes up for a real reason: the company is earning money every year and becoming more valuable. It takes time for your company to earn money.
Loaning money to people with good jobs & income is pretty close to a sure thing.
I've bought stocks before. Some have done well, and some have went 'belly up'. Now I stick to mutual funds. Even the greatest investor in the world Warren Buffet buys stocks for the long term, & rarely trades.
Bonds are loans that you can make to a company or government. They pay interest, but you are relying on the borrower to be able to pay when the loan comes due. This makes them very similar to unsecured bank loans. How much of a "gamble" this is depends on how secure the borrower is.
Day trading stocks is a gamble. There's no interest payments or dividends. You just buy something and hope you can sell it later at a higher price.
Long term investing in stocks is still risky - the company might lose value. But if you invest in companies that are steadily making money, your dividends should give you a net gain even with some fluctuation in stock price.
No, not the same thing. Banks don't lend in hopes of charging interest, banks do charge interest. The banks also use advanced mathematics to very accurately predict what percentage of people will default on the loans and when they will default. They thus know, based on the characteristics of the borrowers how much they will lose through default and they add this amount into the amount of interest paid by everyone in that group (called a risk group). Because of the accuracy of these projections, lenders very rarely lose money and if they do, they make it up by charging that same group of people higher interest rates in future loans.
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All life carries some risk. There is a huge difference between managing risk and gambling.
Banks are not gambling when they loan money. They don't loan you money in the HOPE of charging you interest. They charge you interest. They cover their risk by charging people who are a greater risk a higher interest rate. And sometimes, loans are secured by property, which they take if you default on the loan. When they do sometimes take losses on loans, they more than make up for those losses on the interest they collect on good loans, and they mitigate some of those losses by taking and reselling the security for those securitized loans.
Trading in individual stocks is gambling. That is not investing. Investing carries risk, but investing is buying and holding, and in cases where dividends are paid, reinvesting those dividends. Trading is gambling. When you lose money trading individual stocks, you do not have the cushion against losses that a bank has.
EXACTLY LIKE A UNFAIR GAMBLING, BECAUSE THE STOCK DEALER ( THE ISSURER ) CONTROL THE STOCK PRICE UNDER TABLE. THERE ARE TWO GROUPS OF TRADER, BUYER AND SELLER TO SHARE THE STOCK POOL. DEALER IS NOT INVOLVE THIS STOCK GAME TO BUY OR SELL. DEALER ISSUES MORE PAPER STOCK TO LURE BACK MORE REAL MONEY FROM BUYER AT THE BEGINNING. DEALER PUSH UP THE STOCK PRICE THROUGH HIS TRADE BOOKER OR SO CALLED STOCK ANALYST. THAT MAKE BUYER SELLS THE STOCK TO MAKE PROFIT, HE BECOMES THE SELLER. ANOTHER TRADER TAKES THE STOCK BECAUSE HE BELIEVES THE STOCK SHALL GO UP MORE. AS THE STOCK PRICE REACHES ITS TOP, DEALER ANNOUNCES SOME BAD NEWS FROM THIS COMPANY AND CAUSE THE STOCK PRICE FALLING LIKE A ROCK. SO, THE BUYER HOLDS HIGH PRICE STOCK BECOMES THE VICTIM IF HE DUMP ALL HIS STOCK AT LOW MARKET PRICE, BUT HE CAN HOLD THE STOCK WITHOUT SELLING IT AND HOPE ITS PRICE GOES UP AGAIN IN UNKNOWN TIME.
SO, THIS STOCK TRADE GAME HAS A FEW WINNERS WHOM GET PROFIT OUT FROM MORE LOSERS' CONSTRIBUTION THROUGH STOCK TRADE. ONLY THE DEALER IS A SURE WINNER.
I mean this in the nicest way but if you don't understand the very basics of stocks, bonds, investing etc you have no business playing Day Trader or choosing your own investments unless you can truly afford to lose every dime, quickly.
If you think its the same I suggest you keep your money under your mattress
It can be gambling but doesn't have to be.
If you buy stock hoping that you can sell it for a quick profit because of the daily (or monthly) swings in price, then you are not investing. That is gambling and on a large scale. You are hoping that for some unknown reason, the trading price will go up instead of down, and that you can outguess the public and sell at the best price.
If you buy and hold stock in a quality company that is earning money, you are not gambling. You are part owner of a money making business and the price of the stock goes up for a real reason: the company is earning money every year and becoming more valuable. It takes time for your company to earn money.
Loaning money to people with good jobs & income is pretty close to a sure thing.
I've bought stocks before. Some have done well, and some have went 'belly up'. Now I stick to mutual funds. Even the greatest investor in the world Warren Buffet buys stocks for the long term, & rarely trades.
Yes, and that's a gamble in itself.
You may be confusing stocks with bonds.
Bonds are loans that you can make to a company or government. They pay interest, but you are relying on the borrower to be able to pay when the loan comes due. This makes them very similar to unsecured bank loans. How much of a "gamble" this is depends on how secure the borrower is.
Day trading stocks is a gamble. There's no interest payments or dividends. You just buy something and hope you can sell it later at a higher price.
Long term investing in stocks is still risky - the company might lose value. But if you invest in companies that are steadily making money, your dividends should give you a net gain even with some fluctuation in stock price.
No, not the same thing. Banks don't lend in hopes of charging interest, banks do charge interest. The banks also use advanced mathematics to very accurately predict what percentage of people will default on the loans and when they will default. They thus know, based on the characteristics of the borrowers how much they will lose through default and they add this amount into the amount of interest paid by everyone in that group (called a risk group). Because of the accuracy of these projections, lenders very rarely lose money and if they do, they make it up by charging that same group of people higher interest rates in future loans.