Investing is NOT the Same as Gambling, Ep #88

<p>A listener recently messaged me and said that investing in the stock market—when it’s this volatile—feels like gambling at a casino. Intrigued by her observation, I dove into some research. In this episode of Retirement Made Easy, I share the results of my research and answer the question: <em>Is investing in a volatile market the same as gambling?</em> Don’t miss it!</p> <h2>You will want to hear this episode if you are interested in...</h2> <ul> <li>[2:58] Check out FREE resources at RetirementMadeEasyPodcast.com</li> <li>[4:22] Is investing in a volatile market the same as gambling?</li> <li>[10:21] You’re gambling if you’re trying to time the market</li> <li>[11:44] Company earnings drive performance </li> <li>[13:37] How have things changed since the 1950s? </li> <li>[15:58] Submit questions that you want answered!</li> </ul> <h2>The odds of winning at popular casino games</h2> <p>I can’t argue this fact: The stock market has been extremely volatile in 2022 (which we covered in <a href= "https://retirementmadeeasypodcast.com/how-to-navigate-the-volatile-market-ep-87/" target="_blank" rel="noopener">episode #87</a>). But you should not base your investments on short-term volatility. Instead, a wise investor invests long-term based on meeting long-term goals. If you’re talking about day-trading, it <em>does</em> feel more like gambling to me. I’ve known multiple people who’ve lost their shirts trying to day-trade. That’s <em>not</em> investing. </p> <p>But how does long-term investing compare to gambling? Bloomberg wrote an article published on 12/31/2020 that compared investing to gambling. According to the article, these are the odds at winning at various casino games:</p> <ul> <li>You have a 40% chance of winning at a slot machine</li> <li>You have a 44.7% chance of winning at roulette</li> <li>You have a 48% chance of winning at blackjack</li> <li>You have a 48.6% chance of winning at Craps</li> <li>You have a 46.6% chance of winning at poker</li> <li>You have a 23% chance of winning at Keno</li> </ul>