Many people who decide to start out trading will quickly learn that to be successful in the stock market it will take time and hard work. If you are hoping to turn your dimes into millions overnight this is not the right place for you. If you want to gamble you may have more fun losing your money in the casino. Keep in mind that trading in the stock market can be whatever it is you want it to be. It may start out as gambling but as time goes by you should manage to have enough discipline to take less risks and lower the gambling portion of the stock market. You must accept the fact that the stock market will always have a gambling portion to it. Some people may try to convince you that it’s not, but these people are simply in denial. As you gain more experience and move away from very speculative stocks and become better disciplined, the gambling portion of the market may fall. When you play at the casino you will always be 100% gambling, whereas in the market you may have the hope to bring the gambling portion down to 50%. Why 50%? Because you will always have a 50% chance of seeing your stock move in the opposite direction and lose money on your position. The gambling portion will all depend on what strategy you decide to apply and how disciplined you are. Something that always makes me laugh is when I hear someone say they will make “placements” for you with stocks or any risk attributed assets. Keep in mind that any investments or placements with risk are considered gambling. The only assets that don’t fall in this category are risk-free investments such as GICs, because as its name claims it’s a Guaranteed Investment Certificate. This means there is no risk of losing any of your money, but on the flip side you gain much less money that you could potentially gain by investing. When I hear the word “placement” I always imagine someone taking your money at a game of Roulette and placing $20 on #36, $10 on #24, $15 on #9; let the games begin!
If you don’t know how to play the game, no problem, just let the professional gamblers (traders, portfolio managers, investors) play for you and invest in mutual funds, ETFs, stocks, options, futures…etc. There is a game for everyone and you can simply let the pros take care of it and play for you! Each and every one of them has their own strategy that will make you millions; something I cannot promise.
“I will not guarantee to make you the next millionaire, but I will guarantee that I’ll prevent you from becoming the next homeless guy in the streets”.
Let’s be serious, only a minority of gamblers manages to make it a living and be consistently profitable and be successful. Ironically enough or not, this is the case with the stock market also. If you are a gambler one advantage of losing money in the stock market rather than at the casino is that you’re realized losses in the stock market are tax deductible, whereas your casino losses are not. Although I have been comparing the stock market to the casino, what is actually going on all day is an auction where stocks get auctioned off. You have buyers on one side (Bulls) and sellers on the other side (Bears). Traders who believe a stock will go up are bullish while traders who believe the stock will go down are bearish.
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