Investing, Trading and Gambling. What they all have in common is that everybody participating is looking to make a profit. Typically investing is involved with large sums of money, trading is likely to be smaller amounts such as stocks, and gambling could be associated with a small or a very large amount of money.
Investing is focused on the long term. Investing is putting money at risk at the expectation of receiving a profit. It is how businesses are started, how they expand and start projects. An investment could take a long time to see any return, however it can reap huge rewards. A good investor will invest in something that is out of favour, knowing that in time others will also recognise the value, or predict that circumstances will change over time. A good investment to anyone in the past few years would have been Amazon, which since 2015 has gone from $296 to more than $1,700 a share.
Day Trading on the other hand is related to short term. It is speculation in securities. Day traders react to what is there on the screen. They look to take advantage of short-term price drops in the market and buy and sell in the same day. Examples of this are stocks, options and currencies. Usually, not a lot of risk is taken on each trade, so they don’t get a lot of return on each trade. They look at what the market is telling them and buy or sell accordingly. Day Trading has similarities to investing and gambling. It is recognising a discrepancy and the chance to invest short term, however it doesn’t take into consideration all the factors that are usually involved in investing, and is usually much less money.
Gambling is putting down money hoping for a payoff if the odds go in their favour and a random event occurs. However, the odds are always against the gambler and in favour of the online casino or bookmaker, but people enjoy gambling for the short-term thrill of the chance of winning big. To be honest, gambling enthusiasts playing at online casino Unibet for example, will play the games mainly for entertainment and enjoyment. These type of online casino sites will not only provide a wide range of games, but tournaments and competitions for all players to interact. The actual winning huge prizes and jackpots is a bonus to what is already a fun and exciting pastime.
In conclusion, there are similarities between all three. All three activities are fundamentally risking money in order to see a profit. Investing is likely to be a slow process and consider the long term, where as trading will look at what is happening there and then. Gambling is placing money hoping on an outcome of a random event, which by nature can’t have the same considerations as investment or trading. As all three can result in a loss of money hoping for a return, they are all alike in a sense. However, investing and trading can be seen as the more considered approaches.
CaptainAltcoin’s writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner.