Investment can also be well known from gambling and some of the examples of gambling are card games, lotteries, and horse race. Gambling includes high risk and not only for high returns but also the associated excitement and it is unplanned, unscientific without the knowledge of the nature of the risk involved.
Investment is defined as the employment of funds to acquire certain assets after due diligence for mid to long period. Investments deal is generally done for real assets. Most of the people are nervous about investing money in the market because they believe that investing has more to do with luck.
People also believe their ability to earn a return on their investment comes down to pure chance such as the flip of a card or roll of the dice. Investment is being done for the creation of wealth and also investments are considered as gambling.
Investors and gamblers both are want to put more money in their pockets and also the investing and gambling could not be more different. If an individual is investing without fundamental analysis, based on market sentiments and if an individual who invests with proper fundamental analysis for a longer period of duration can be defined as an investor.
Investment Vs gambling:
Here you are going to see the difference, let’s see about the difference between gambling and investing,
Leverages: Investors are allocating money from their resources for the investment and this applies mainly to assets to the equity market. Generally, gamblers are allocated their own money and bet for entertainment.
Price of asset: Gambling id based upon odds and bets are placed only on assumptions and at the same time investor does not look at the price of the asset rather it looks at the asset itself to determine the decision to allocate money now to get money back later on.
Time horizon: Gambler placed a bet for immediate gain and on the other hand investors allocate money for a particular asset for a longer period.
Risk analysis: Investors do have long term risk and return perspective and also they will rely on the fundamental analysis of financials. This can affect the price of the asset class and their decision to invest in a particular asset. It is based upon the certain fundamental values associated with the asset.
But the gambler risk entire capital on bet and relay mainly on luck and they are highest risk-takers and ready to lose original investment also.
Financial profile or funds availability: Investment is stock trading gambling, and their funds or looking to create wealth and on the other hand gambling has wealth and looking to have fun.
Finally, invest wisely after proper analysis of the company to secure hard money for fairly good chances for the creation of wealth and gambling should be avoided, in most of the cases gambling is not legal. These are the basic thing about investment vs gambling and it will be useful for you before investment.