Frequently, capital markets are compared to a casino. Place some money on X stock and you might just as well play craps! Here is our official site.
If that’s your feeling, and it keeps you away from the markets, consider:
It’s one of the unusual styles where the odds are stacked in your favour if investing is structured gambling!
Why would that be?
The secret to knowing the investor’s edge is corporate income. By purchasing a share of the stock it gives its holder an ownership claim on the earnings of that business. If those earnings go up, then the price of the stock will typically also increase. Makes sense, isn’t that? Ownership of a business that has higher income should be worth more than ownership of a business that earns less.
A stock market investment comes down to this: It’s a “bet” for corporate profits to grow! It is a pretty decent wager, based on historical facts! Not by any means a guarantee but one that you have house chances.
Not persuaded yet?
You might say to yourself that just because the growth in corporate earnings in certain years doesn’t mean that there aren’t years in which they fall. Sufficiently true. But corporate profits have risen in far more years over the last 200 years than they have declined. And that’s because developed-country economies grew at a reasonably steady rate with just a few sporadic recession setbacks.
And that means that stockholders with a strong combination of firms are more likely to make money than not!
Gambling simply transfers money from a loser to a winner because nothing is made … Excluding extreme adrenaline doses!
Investing, on the other hand, raises total wealth because the money invested in stocks provides the initial finance for businesses that exist for the manufacture of goods and services.