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> always considered the stock market to be gambling I also feel this way, and all of the terminology and marketing around the stock market definitely reinforce

> always considered the stock market to be gambling I also feel this way, and all of the terminology and marketing around the stock market definitely reinforces this belief. I have my retirement put into one of those diversified retirement mutual fund things which I completely ignore, but other than that, I don't mess around with stock market stuff at all. The up & down junk, trying to decide when to buy or sell, all that stuff makes me feel terrible. Same feeling as going to a casino. Not my kind of fun. I don't want anything to do with it.

psunavy03 1y ago
This mentality is why so many people stay poor.
- UncleOxidant 1y ago
  How would you convince people that they aren't gambling when investing in stocks? It's easy to say that this fear will keep them poor, but how would you alleviate their fears? There certainly do seem to be features of the current market that seem quite akin to gambling. Are current price/earnings ratios warranted? What about market manipulation by tweets that we see from the current administration? It seems that insiders that are privy to certain information will do much better than your average investor. At some point, people don't want to be suckers and decide to no longer participate.
  - bombcar 1y ago
    The best argument I've been able to find is when they're offered a company match in their 401(k) or similar. Basically - total market index funds have very low cost, and the entire market has very rarely gone down 50%, and eventually recovered. Since your company is matching you 50% (or 100%) on your contributions, if the market goes down you're losing "house money/free money" you wouldn't have otherwise. Then after years and years they just get used to it.
  - psunavy03 1y ago
    Because gambling is ultimately just betting on a random number generator that's actively weighted against you. Investing is betting on the competence of an executive team to run a business. One of these, you have no control over. The other one is a win-win situation. If the business does well, you do well. It's like saying that because your sibling or friend ended up in a shitty relationship that you need to be celibate for your entire life . . . no, you don't. Just because Company A blew up doesn't mean Company B will. And to be clear, I'm not a fan of stock picking as a core investment strategy, but I'm talking about dollar-cost averaging in equities (low-cost index funds) as opposed to stashing cash under the bed. Long-term, betting on the economy is free money.
    - UncleOxidant 1y ago
      > Investing is betting on the competence of an executive team to run a business. One of these, you have no control over. But again, you're asking people to have a lot of trust in this executive team. Unless we have the legal and regulatory framework that can enforce that trust it all becomes very sketchy. And right now it seems like the legal and regulatory frameworks are under attack. It's becoming more a game of "who you know" and favor currying. That kind of erosion of trust is really dangerous for the markets.
    - coldpie 1y ago
      > as opposed to stashing cash under the bed. There are more options than this. My savings account gives something above 4.5%, and if that rate does go down, there's CDs and stuff like that. And I assure you, I'm not poor, lol :)
      - ryandrake 1y ago
        > My savings account gives something above 4.5% Have you checked recently? Short term Treasury yields are hovering around 4% now, so I'd be surprised if HYSAs are yielding more than that today.
        coldpie 1y ago
  - saltcured 1y ago
    It may not be possible, but you need to get people to realize that thinking in absolutes is not principled, it is naive. All of our existence involves gambling in the sense of balancing probabilistic risks. You need something more nuanced to distinguish gambling (the moral vice) from risk management (the inescapable survival tool).
  - bregma 1y ago
    > How would you convince people that they aren't gambling when investing in stocks? Same way you convince them betting on the ponies is not gambling. If you pick a sure thing you're guaranteed to make money. All you need is a system.
  - throw0101b 1y ago
    > How would you convince people that they aren't gambling when investing in stocks? How about: > But in a casino the longer you play, the higher your chances of walking away a loser since the house has the edge. > The stock market is the opposite of a casino. The longer you play, the higher your odds of success in terms of experiencing positive returns on your capital. * https://awealthofcommonsense.com/2023/05/the-stock-market-is-not-a-casino/ https://awealthofcommonsense.com/2023/05/the-stock-market-is... * https://www.cfainstitute.org/insights/articles/investing-vs-gambling https://www.cfainstitute.org/insights/articles/investing-vs-...
lr4444lr 1y ago
I don't understand why this is being downvoted. This is exactly the mentality that Jack Bogle promoted: stay out of individual stocks, load up on a diversified stock index fund that pivots gradually toward stabler assets like bonds as you age.
- UncleOxidant 1y ago
  [flagged]
cortesoft 1y ago
The tricky thing is that the stock market CAN be gambling, but it doesn't have to be. Day trading is gambling. Buying triple levered ETFs is gambling. Investing in a diversified index is NOT gambling, because it isn't a zero-sum game, where you have winners and losers. You are investing in the growth of the economy as a whole.
- ajmurmann 1y ago
  IMO one of the communication issues is that there is more money to be made by media talking about individual stocks and how to time the market then by saying "buy SPY and forget about it".
- daseiner1 1y ago
  > Investing in a diversified index is NOT gambling, because it isn't a zero-sum game, where you have winners and losers. You are investing in the growth of the economy as a whole. I’ve genuinely never understood why this is so unintuitive to many otherwise intelligent people I’ve known. Over a long enough time horizon (and with prudent management of risk as one ages/approaches retirement) serious increase in wealth is all but guaranteed short of the US absolutely collapsing. And if that happens, then we’d all have bigger fish to fry.
  - giantg2 1y ago
    It's unintuitive because it's technically not true. All that suff about time horizon is right, but there's a legitimate reason that the fine print on the perspectus says you could lose your entire investment.
    - daseiner1 1y ago
      I’ll allow that I have the misguided presumption that I’d’ve been so smart as to have pulled my money out of the market just before Black Monday in 1929. But I still stand by the belief that the “gamble”, if following the Vanguard model of DCA and prudently managing risk over time to gradually shift from stocks to more stable “receptacles of wealth” whether bonds/gold/cash, is only a gamble that the United States (and thereby the world economy) will not utterly collapse on the scale of world war.
neutronicus 1y ago
It is, in fact, gambling. However, unlike going to a casino, elected leaders are under enormous pressure to ensure positive expected value - which is precisely why "diversified retirement mutual fund things" are such a good idea for the public investor - they're basically saying "sign me up for EV, please and thank you". Also unlike going to a casino, some stocks pay dividends and you would in principle receive a share of the proceeds (after paying creditors) if the company liquidates all its assets.

psunavy03 1y ago

This mentality is why so many people stay poor.

UncleOxidant 1y ago
How would you convince people that they aren't gambling when investing in stocks? It's easy to say that this fear will keep them poor, but how would you alleviate their fears? There certainly do seem to be features of the current market that seem quite akin to gambling. Are current price/earnings ratios warranted? What about market manipulation by tweets that we see from the current administration? It seems that insiders that are privy to certain information will do much better than your average investor. At some point, people don't want to be suckers and decide to no longer participate.
- bombcar 1y ago
  The best argument I've been able to find is when they're offered a company match in their 401(k) or similar. Basically - total market index funds have very low cost, and the entire market has very rarely gone down 50%, and eventually recovered. Since your company is matching you 50% (or 100%) on your contributions, if the market goes down you're losing "house money/free money" you wouldn't have otherwise. Then after years and years they just get used to it.
- psunavy03 1y ago
  Because gambling is ultimately just betting on a random number generator that's actively weighted against you. Investing is betting on the competence of an executive team to run a business. One of these, you have no control over. The other one is a win-win situation. If the business does well, you do well. It's like saying that because your sibling or friend ended up in a shitty relationship that you need to be celibate for your entire life . . . no, you don't. Just because Company A blew up doesn't mean Company B will. And to be clear, I'm not a fan of stock picking as a core investment strategy, but I'm talking about dollar-cost averaging in equities (low-cost index funds) as opposed to stashing cash under the bed. Long-term, betting on the economy is free money.
  - UncleOxidant 1y ago
    > Investing is betting on the competence of an executive team to run a business. One of these, you have no control over. But again, you're asking people to have a lot of trust in this executive team. Unless we have the legal and regulatory framework that can enforce that trust it all becomes very sketchy. And right now it seems like the legal and regulatory frameworks are under attack. It's becoming more a game of "who you know" and favor currying. That kind of erosion of trust is really dangerous for the markets.
  - coldpie 1y ago
    > as opposed to stashing cash under the bed. There are more options than this. My savings account gives something above 4.5%, and if that rate does go down, there's CDs and stuff like that. And I assure you, I'm not poor, lol :)
    - ryandrake 1y ago
      > My savings account gives something above 4.5% Have you checked recently? Short term Treasury yields are hovering around 4% now, so I'd be surprised if HYSAs are yielding more than that today.
      - coldpie 1y ago
- saltcured 1y ago
  It may not be possible, but you need to get people to realize that thinking in absolutes is not principled, it is naive. All of our existence involves gambling in the sense of balancing probabilistic risks. You need something more nuanced to distinguish gambling (the moral vice) from risk management (the inescapable survival tool).
- bregma 1y ago
  > How would you convince people that they aren't gambling when investing in stocks? Same way you convince them betting on the ponies is not gambling. If you pick a sure thing you're guaranteed to make money. All you need is a system.
- throw0101b 1y ago
  > How would you convince people that they aren't gambling when investing in stocks? How about: > But in a casino the longer you play, the higher your chances of walking away a loser since the house has the edge. > The stock market is the opposite of a casino. The longer you play, the higher your odds of success in terms of experiencing positive returns on your capital. * https://awealthofcommonsense.com/2023/05/the-stock-market-is-not-a-casino/ https://awealthofcommonsense.com/2023/05/the-stock-market-is... * https://www.cfainstitute.org/insights/articles/investing-vs-gambling https://www.cfainstitute.org/insights/articles/investing-vs-...

lr4444lr 1y ago

I don't understand why this is being downvoted. This is exactly the mentality that Jack Bogle promoted: stay out of individual stocks, load up on a diversified stock index fund that pivots gradually toward stabler assets like bonds as you age.

UncleOxidant 1y ago
[flagged]

cortesoft 1y ago

The tricky thing is that the stock market CAN be gambling, but it doesn't have to be. Day trading is gambling. Buying triple levered ETFs is gambling. Investing in a diversified index is NOT gambling, because it isn't a zero-sum game, where you have winners and losers. You are investing in the growth of the economy as a whole.

ajmurmann 1y ago
IMO one of the communication issues is that there is more money to be made by media talking about individual stocks and how to time the market then by saying "buy SPY and forget about it".
daseiner1 1y ago
> Investing in a diversified index is NOT gambling, because it isn't a zero-sum game, where you have winners and losers. You are investing in the growth of the economy as a whole. I’ve genuinely never understood why this is so unintuitive to many otherwise intelligent people I’ve known. Over a long enough time horizon (and with prudent management of risk as one ages/approaches retirement) serious increase in wealth is all but guaranteed short of the US absolutely collapsing. And if that happens, then we’d all have bigger fish to fry.
- giantg2 1y ago
  It's unintuitive because it's technically not true. All that suff about time horizon is right, but there's a legitimate reason that the fine print on the perspectus says you could lose your entire investment.
  - daseiner1 1y ago
    I’ll allow that I have the misguided presumption that I’d’ve been so smart as to have pulled my money out of the market just before Black Monday in 1929. But I still stand by the belief that the “gamble”, if following the Vanguard model of DCA and prudently managing risk over time to gradually shift from stocks to more stable “receptacles of wealth” whether bonds/gold/cash, is only a gamble that the United States (and thereby the world economy) will not utterly collapse on the scale of world war.

neutronicus 1y ago

It is, in fact, gambling. However, unlike going to a casino, elected leaders are under enormous pressure to ensure positive expected value - which is precisely why "diversified retirement mutual fund things" are such a good idea for the public investor - they're basically saying "sign me up for EV, please and thank you". Also unlike going to a casino, some stocks pay dividends and you would in principle receive a share of the proceeds (after paying creditors) if the company liquidates all its assets.