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> How is that gambling? When you buy the shares of company A instead of company B, because you want to gain more, you are betting that the price of company A i
by danmaz74 9y ago
> How is that gambling?
When you buy the shares of company A instead of company B, because you want to gain more, you are betting that the price of company A is undervalued on the market compared to company B. This is perfectly fine IMHO, but it's still a bet.
- mancerayder 9y agoSo then, it logically follows that buying an index fund per your definition is also gambling, because you're betting that the stock market index as a whole will continue to go up. It may be a bet with better odds or worse odds, but it's still a bet.
- danmaz74 9y agoWe're entering sorites paradox(1) terrain here. I would say that what differentiates "gambling" from "investing" is the amount of risk you're choosing to take. The lowest risk you can take is distributing your savings between money, stocks, bonds and real estate. For the stocks part, the lowest risk strategy is buying index funds. So, if you distribute your investment and use index funds for stocks, I would definitely say you're not gambling by any reasonable definition of the word. In between, I'll leave it to everybody to decide for themselves where they want to put the threshold. 1) https://en.wikipedia.org/wiki/Sorites_paradox https://en.wikipedia.org/wiki/Sorites_paradox