Isn't investing just gambling?

[David]

Don't forget to use the Search Y! Answers search box (just type “gambling and investing”). This question is asked often here and widely misunderstood, but only by those who know little about the markets and trading.

But trading is a vocation, and like any vocation, it takes hard work, lots of study, and the testing of your theories, learning what makes you tick, learning your own particular time and stress levels. People looking for the magic formula or a crystal ball or the pot of gold (get-rich-quick schemes) will find that Day Trading or Technical Analysis is too much work. It is so much easier to simply Buy & Hope or gamble and rely on luck.

Gambling and luck are completely useless in preparation for life, comfort, peace, happiness, success and retirement. Only through investing, not gambling, can you utilize your God-given resources and concentrate on things that are true, honest, just, pure, lovely and of good report, and if there be any praise, think of virtue to further your goals. But it seems many people don't have proper goals any more than they have a proper trading plan, and insist on being gamblers wherever they go, whatever they do. You can gamble on anything.

One of the most important Samurai texts ever written, by Miyamoto Musashi, “The Book of the Five Rings (1643)”, offers this advice: “Think of what is right and true. Learn to see everything accurately. Become aware of what is not obvious. Be careful even in small matters. Do not do anything useless.”

Gambling is useless entertainment, while investing furthers our goals. There can be no great success in trading (life) without great commitment, hard work, discipline, and the realization of the “right” type of thinking.

Approached as a gambler with only chance and luck and a TV and a newspaper to guide him, trading or even “investing” is very similar to gambling or betting on a horse race.

But by the Trader's definition of trading, there is no comparison. Traders focus on risk control and money management. Gamblers rely on chance, roll the dice and hope. Traders are buying and selling an asset, gamblers hope on nothing.

Timing is critical to the Day Trader,. It's vital that he pay attention to multiple sources of information, sift through them, prioritize each separate piece, and make an astute decision once all information has been scrutinized, and depending on the time frame or volatility, this may need to be done every few seconds or minutes. You place your bet and hope with gambling, but this evaluation process goes on all day long with trading. Most beginners don’t realize that a trader focuses on risk. We manage and control risk; rather than traders, you could call us professional risk managers and be more accurate. By trading at support or resistance or a Fibonacci number or at a trend line or buy on a pullback, we have reduced our risk and tipped the odds in our favor. With gambling, you have no control over anything, and the house odds are always against you.

You can't be distracted and unfocused while formulating a trading plan or monitoring an ongoing trade. With gambling, you can do drugs and drink and entertain your woman and party at the same time, because there really is no intelligence being processed. Any idiot, whom has chosen to be ignorant, can be a gambler; no study required. Anyone who invests without first reading a few books is simply being foolish.

We, who live by values, not by loot, are traders, both in matter and in spirit. A trader is a man who earns what he gets and does not give or take the undeserved, like a gambler. We do not rely on luck.

by definition:
Investopedia explains Investing
Investing is the key to building wealth, but investing in and of itself is not enough. You have to invest wisely!

When you place a bet on a casino game, you are actually buying a “chance or opportunity”. It is an intangible product.
When you invest in stocks, you are investing in the business. You are investing into a tangible product or business.

Gambling is a type of entertainment. Nobody in their right mind will use gambling as a means to a better financial future (there are always exceptions, but very few). Why? Because over the long-term, the casino always wins (in general). There is nothing for the gambler to own here.

Investing in stock is a good way to build up your personal wealth. It is a great tool to offset inflation. Over the long-term, your investment will appreciate and at the same time you also earn dividend income from your stocks (from assets and things that you own).

A true investor will have a plan. They enter and exit the market based on the prospect of the stock over the long-term. This makes them less vulnerable to short-term fluctuations, hence reducing the gambling element.