Would you consider some type of investments not part of agambling activity? If so list...

Would you consider some type of investments not part of a gambling activity? If so list some of these types of investments and explain your answer.

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Expert Solution

Investment and gambling is very much same but in some cases we can not call it gambling. There are few ways which can not be called gambling. Those are as follows :

1.In casino one of the game is Blackjack has best odds but in this case also house has advantage over it. Casino always do better than a gambler average. But in case of stock investing investor has got some advantage over here because stocks rise more than fall over a long period of time. so investor can use it by averaging his position through buying and holding it and there has risk premium attach to it. This is investor edge which investor can be used to get higher investment returns.

2. In gambling gambler cant get research data immediately for research before his gambling but investor can use quantitative data available to do their proper research and invest in shares for short term or long term just by looking into in. Data driven investment is very helpful for investor to generate higher returns.

3. Borrowing can be very disastrous for gambler as well as investor if person is gambling. But Proper money management technique and risk reward application investor can pre define their risk with hedging. After certain time the return will be more than loan interest rate and earn more interest in market by just investing.

4. By using proper set of rules and psychology analysis of tools like taking journal of Investments and trades that would not be gambling as gambler lose control on his money after lose or greed.

jeff jeffy answered 2 years ago

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