Several times in my short career as an economics professor, I have had someone tell me that investing in the stock market is morally questionable because 'it's like gambling.' Certainly the unusual volatility we have seen in the stock market over the last several years has, like a lottery, enriched some and impoverished others. But is buying a share of stock like buying a lottery ticket?

Gambling and stock market investing both involve risk-taking, but this does not equate the two. Taking risk is inherent to diligent and productive work (Proverbs 22:13; Ecclesiastes 11:4). Gambling is consumption — it is done for the entertainment value of taking a risk. Stock market investing contributes to production — it is the taking on of risk as part of providing a valuable service. Because gambling is consumption, a gambler can expect to lose money, on average. An investor in the stock market can expect a considerable return, on average.

The Problem with Gambling

Gambling, reduced to its essence, is the exchange of a dollar for an expected return of somewhat less than a dollar, sometimes accompanied by blinking lights and spinning wheels. Now, we cannot say that gambling is wrong because it is entertaining, nor can we say that it is wrong because it is risky. We cannot even say that it is wrong because the gambler is likely to wind up poorer, for there are plenty of legitimate activities that cost money. A gambler is engaged in morally questionable activity because he is deriving entertainment from that which ought to have no entertainment value, like one who laughs at a car accident. A gambler takes that which is certain — a bird in the hand — and exchanges it for that which is uncertain — a less than 50-50 chance at the two in the bush. Gambling is entertainment for people who enjoy risk and uncertainty for their own sakes. The Bible encourages avoidance of risk (Ecclesiastes 11:1, 2), not reveling in it.

Why Stock Prices Change

People who believe the stock market is like gambling apparently misunderstand the source of fluctuations in stock prices. What seems like random movements or the product of mass psychology actually has a rational economic explanation.

This may be difficult to believe, given the rapid changes in the value of, say, Internet stocks in the last five or six years. First they increased at a rapid pace, even for a few firms that could not show a profit. The closely watched P/E ratios — the ratio of stock price to actual earnings — began to rise to stratospheric levels. Then, as though stockholders had suddenly and simultaneously lost their trust in these firms, the prices began to fall. Had the stock price lost all connection to a rational assessment of the firm's value? Most people seemed to think so. Yet it is not necessary to appeal to irrationality or mass psychology to explain these changes. A firm's stock price is a reflection of the firm's expected ability to produce earnings. Expectations change with new information, and with new interpretations of old information. Therefore, while the actual earnings of a firm may change only gradually, new information can appear instantaneously that causes people to re-evaluate the firm's prospects.

'Share Market is Gambling.Its like Cards game.Many of people became mental because of this.so don't enter into market.' Most of people think Share market is gambling or cant make money. Investing in the stock market is not gambling, and novice investors should not think of it in that way. Equating the stock market to gambling is a myth that people on the internet and television pundits have perpetuated for years. And, it’s simply not true. In 2015 annual gross-gaming yield for the online bingo industry from UK customers along £128.64 million, or 3% of the entire online gambling market share. The Great iGaming Equation. Investing in stock market is just like gambling. Some people fear of investing by thinking that way. It will depend on the perception of how we feel about it. The problem arose when most of the people treated investing in the stock market like a casino, wish to win big, especially the novice investors should not assume this way.

Stocks are generally traded for two reasons. The first is that each individual's investment goals will change over time, and each person will want to change his portfolio to reflect his tolerance for risk, need for income, or liquidity. The second reason is that the person selling the stock has a lower view of the firm's prospects than the buyer. The seller's opinion could be based on unique information he has which the buyer does not, or it could be that the two parties to the transaction simply have formed different theories about the same information. Some have said that selling stock during a boom is a matter of finding a 'greater fool' to take the stock off one's hands in exchange for dollars, but this is a matter of perspective.

Market Speculators

Share Market Is Gambling Or Not Recognized

Speculation in the stock market — buying now in anticipation of selling at higher prices later — is valuable and completely moral. Firms that discover ways of being more productive will be recognized by stock-market speculators, and their stock prices will rise to reflect the higher market value of the firm. The firm will benefit directly because its debt will fall as a percentage of its recognized market value, making it easier for the firm to borrow more if it chooses. Later, the firm may find it easier to raise capital by selling new shares of stock, perhaps for higher prices. Because of the information provided by speculation in the stock market, firms with good ideas are recognized early and rewarded with easier access to capital. Firms with poor management or other problems are denied capital. In return for performing the valuable service of identifying more productive firms, the speculator receives compensation in the form of capital gains. Though stock traders are often denigrated as not really 'working' for their living, they are some of the most important individuals in society. Speculation, and the information it provides, are indispensable to wise stewardship of resources.

Does everyone who invests in the stock market have this ability to judge, this skill in evaluating the future prospects of firms? No, of course not. However, over time, those with poorer judgment tend to lose money and be discouraged from future investment. Those with exceptional abilities may 'rent' their skills to others for a fee — leading to a class of professional investors who handle funds for the less capable. Yet all investors have one common trait — a willingness to put off consumption and devote resources instead to that which makes the economy grow in the long run.

As we have seen, investment in stocks provides us with valuable information — a constantly changing market assessment of the values of corporations. This should not be confused with gambling simply because of the risk involved. Instead, we should appreciate participants in this market as future-oriented contributors to long-term economic growth.

Topics: Biblical Law, Business, Culture , Dominion, Economics

Some people see investing in the stock market as a gamble, but it is not the same as gambling at a casino. In fact, real investors will tell you that there is no gamble involved. It is more like a job that earns them money, it just so happens that some days they might lose rather than win.

That happens all the time if you visit the roulette or poker tables, but with investing, you have to look more long term and appreciate that one day’s loss can just as easily turn into a profit the following day. That never happens when you are gambling. You have to say goodbye to your money if your cards do not come up.

The Differences Between Investing And Gambling

Investing in stocks involves the performance of companies and is not a wager on what the outcome of the spin of the wheel will be. If you create a long-term plan, as suggested in the Mark Matson reviews, it lets you make any changes that are needed along the way to improve your investments.

You can research the companies you are considering investing in. You can easily discover what their net worth is, how they are performing, and if the stocks are likely to go up or down in value. You have no chance beforehand of knowing what cards the dealer will hand you and no amount of research can answer this question for you.

If a company is making profits and you own stocks it in, you may receive dividends from them. No casino is going to offer you any money just because they have been profitable for the last six months.

The value of your investment can increase, although it may take some time to do so. This will help to increase your wealth. Gambling is a straightforward win or lose, and your money will not be worth any more than it was on the day you used it at the casino.

Share Market Is Gambling Or Not Working

Being A Smart Investor

If you are serious about investing in the stock market, the first thing to do is to learn how it works. The more you know about the processes of buying and selling stocks the more likely it is you will be successful.

Then start looking at a few companies that you like the look of. See how they are performing and how this is affecting their stocks. It is wise to follow them for a few weeks, as that way you will learn more about each one and what things can affect the value of stocks.

Share Market Is Gambling Or Not Applicable

By now you will have a lot more knowledge than before you started thinking of investing, but just be patient for a little longer. Using an amount similar to the one you are planning to invest, practice buying stocks without actually doing it. This will let you see if what you have learned is good enough to make sound investments, and if your ‘pretend’ investments do well, you are ready to get started with real money.

Share Market Is Gambling Or Not Allowed

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