We may be able to invest in different business sectors, but how can we predict which industry or which sector goes up? Its just like gambling in the sense that you don't know what the future lies in the stock you own, right?
Wrong!
The stock market is NOT like gambling. It can definitely be considered risky and volatile. Though you cannot predict which industry might be going up on the certain day or quarter, you can however make a calculated assumption based on the company's 10-k, which is their quarterly report on how their business is doing. Does gambling have this?
The key to being successful is having a long term plan, something that does not fit in gambling, and you also need to diversify and educate yourself in the growing market. Because there are a variety of securities to invest in, you can choose one based on the risk you are willing to take.
Lets not forget that you can also make money when stocks go down. That's called short selling a stock. This is kind of like gambling, where you bet against something if you think it will lose, but here again we are making an informed decision based on data and news reports of the company.
Short selling a company stock can be frowned upon by those conservative investors, but don't let that frighten you from making some money intelligently. The reason conservative investors do not like short investing is because unlike simply buying and selling a stock on the market, you are only able to lose what you put on the table. Not so for short selling, where you can have infinite (not really, but you understand the concept) loss on your trade.
You can even wind up going down the gutter on the particular stock investment, and then some.
Watch out for short selling fees. Always look at the price guide on your financial broker's website. It's a good tip to have this sheet by you when going through the buy/sell process. Most online financial brokers charge around $4-$10 per trade (yes, buying and selling are separate transactions), however your local broker who consulted with you on buying a particular stock can charge anywhere from $20 and up because of the advice he gave you.
Wrong!
The stock market is NOT like gambling. It can definitely be considered risky and volatile. Though you cannot predict which industry might be going up on the certain day or quarter, you can however make a calculated assumption based on the company's 10-k, which is their quarterly report on how their business is doing. Does gambling have this?
The key to being successful is having a long term plan, something that does not fit in gambling, and you also need to diversify and educate yourself in the growing market. Because there are a variety of securities to invest in, you can choose one based on the risk you are willing to take.
Lets not forget that you can also make money when stocks go down. That's called short selling a stock. This is kind of like gambling, where you bet against something if you think it will lose, but here again we are making an informed decision based on data and news reports of the company.
Short selling a company stock can be frowned upon by those conservative investors, but don't let that frighten you from making some money intelligently. The reason conservative investors do not like short investing is because unlike simply buying and selling a stock on the market, you are only able to lose what you put on the table. Not so for short selling, where you can have infinite (not really, but you understand the concept) loss on your trade.
You can even wind up going down the gutter on the particular stock investment, and then some.
Watch out for short selling fees. Always look at the price guide on your financial broker's website. It's a good tip to have this sheet by you when going through the buy/sell process. Most online financial brokers charge around $4-$10 per trade (yes, buying and selling are separate transactions), however your local broker who consulted with you on buying a particular stock can charge anywhere from $20 and up because of the advice he gave you.
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