Why the Stock Market Is Not a Casino!

Why the Stock Market Is Not a Casino!

One of the cynical reasons investors give for avoiding the stock market is to equate it with a casino. “It’s just a big gambling game,” some people said. “Everything is rigged.” These statements may be true enough to convince some people who haven’t taken the time to learn more. RTP Slot Gacor today

As a result, they invest in bonds (which may be much riskier than they anticipated, with very little chance of reward) or stick to cash. The results of their profits are often disastrous. Here’s why they’re wrong:

1) Yes, there is an element of gambling

But-Imagine a casino where the long-term odds are rigged in your favor, not against you. Imagine also that all games are like black jack and not slot machines, where you can use what you know (you are an experienced player) and the current state (you have been paying attention to the cards) to improve your chances. . Now you have a more reasonable stock market forecast.

Many people will find it hard to believe. The stock market has not progressed for 10 years, they complain. My Uncle Joe lost a lot of money in the market, they said. Although markets sometimes weaken and may even underperform for long periods of time, market history tells a different story.

Over the long term (and yes, sometimes the long term is very long), stocks are the only asset class that can consistently beat inflation. The reason is clear: over time, good companies grow and make money; they can pass those profits on to their shareholders in the form of dividends and provide additional profits from higher share prices Slot Mahjong Ways 3.

2) Individual investors sometimes fall victim to unfair practices, but they also have some surprising advantages.

No matter how many regulations and legislation are passed, it will never be possible to completely eliminate insider trading, questionable accounting, and other illegal practices that victimize the uninformed. But often, paying close attention to financial reports will reveal hidden problems. What’s more, good companies don’t have to engage in fraud—they’re too busy making real profits.

Individual investors have a huge advantage over mutual fund managers and institutional investors, because they can invest in small companies and even MicroCap companies that the big kahunas can’t touch without running afoul of the SEC or corporate regulations.

While these smaller companies are often riskier, they can also be the source of the greatest profits.

3) This is the only game in town.

Aside from investing in commodity futures or trading currencies, which are best left to professionals, the stock market is the only widely accessible way to grow your nest egg to beat inflation. Almost no one gets rich by investing in bonds, and no one gets rich by putting their money in the bank.
Knowing these three key issues, how can individual investors avoid buying at the wrong time or falling victim to fraudulent practices?

Here are six actions you can start with:

1) Consider the P/E ratio of the market as a whole and your stock in particular.

Often, you ignore the market and just focus on buying good companies at reasonable prices. However, when stock prices exceed earnings, there will usually be a decline. Compare historical P/E ratios to current ratios to get an idea of ​​what is excessive, but keep in mind that the market will favor higher P/E ratios when interest rates are low.

2) When inflation and interest rates spike, markets will often plummet…watch out.

High interest rates force companies that rely on loans to spend more of their money to increase revenue. At the same time, money and bond markets began to provide more attractive interest rates. If investors can earn 8% to 12% on a money market fund, they are less likely to take the risk of investing in the market.

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