When a retail investor buys securities, or stock, (e.g. 20 shares of Netflix), they’ll more often than not refer to this as “investing”, but that’s not usually what it is. That same retail investor may argue that by the Merriam Webster definition they really are investing by “committing money to gain a financial return”. However, if they were to look up the definition of gambling, might they actually simply be “betting on an uncertain outcome”?
If your decision to buy a security is driven by a sentence similar to “I think that the price of this stock will go up”, you’re probably gambling. What then, when buying stocks, would distinguish between investing, gambling or donating?
Part 1: Buying stocks is like gambling
This is a 3-part post, with posts 2 & 3 to follow