Investing - Theory, News & General • Vectors "Nov 2024"

People who say that investing in stocks is gambling don't understand the difference between investing and gambling. Gamblers deal with risk, but investors deal with uncertainty. The two words are not synonymous. Bet on a roll of the dice and you have a known probability of winning. But since there are so many variables that influence asset prices, investors will always be at the mercy of the unpredictable and unexpected. The gambler may lose all his money but an investor with a globally diversified allocation to equities cannot (short of the end of the world) lose all his money. One disheartening trend in recent years has been the “gamblification” of investing. Investors are being encouraged to trade more actively and take more risks. We now have animated brokerage apps, free trades, streaming market updates on our phones, and easy access to traders lying about their gains on social media. An analysis of more than 2,700 video posts on YouTube, TikTok, and Instagram by Social Capital Markets revealed that more than 80% of the videos omitted disclaimers informing viewers of the risks of investing. What's worse, almost 60% of videos promised guaranteed returns, while just 13% of the videos were from sources with the relevant qualifications or credentials to offer financial advice. As Warren Buffett observed, “Markets now exhibit far more casino-like behavior than they did when I was young. The casino now resides in many homes and daily tempts the occupants.” Never before has the madness of crowds been shouted so loudly or more widely. Listen to the cacophony at your own peril.

Statistics: Posted by arcticpineapplecorp. — Sat Nov 09, 2024 6:36 pm — Replies 2 — Views 407