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When does investing become gambling?
(lemmy.world)
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this post was submitted on 17 Jun 2024
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This is a bad outlook, there are plenty of low risk investment strategies that are meant as income generation, and it's generally what you should switch to as you start needing to cash in on your savings, these are things like laddered tbills and dividend stocks.
You can go slightly riskier doing things like wheeling options if your tolerance is higher.
Investment profiles differ for a reason and the term of the investment is just part of the strategy.
I should add that 'buy and hold' does not make something not a gamble.
If I told you I bought a random crypto currency or penny stock with no future or fundamentals and plan to hold on to it for 10 years because I just know it's gonna hit big, would you not consider that a gamble?
Yes. I'd call that an investment in crypto. A risky investment is still an investment.
Maybe we just define the terms invest and gamble differently.
I would say investment is giving your money / time / energy into something with the expectation / belief / hope that eventually in the long run, that thing will become what you want.
Gambling on the other hand, is putting money / time / energy into something with the expectation / belief / hope that it will eminently get you something you want.
Either could be high or low risk. They may not pay money out at all.
You make an investment in teaching your kids to drive, so they will be more independent and capable in the future.
You make a gamble on teaching your kids to drive, that they won't get them selves into a wreck tomorrow.
Gamble = Short term
Investment = Long term
But term is all relative, long term means something different for everyone.
A four week t-bill has the same term as a hugely out of the money long call on a meme stock, and yet one is a tried and true investment strategy and the other is very clearly gambling.
The difference isn't the time, it's the risk profile.
That's what I mean by using different definitions.
I don't use the terms gamble or investment exclusively as an evaluation or indication of risk; More as a term of intent.
While I might not call a four week t-bill a gamble, I certainly wouldn't call it an investment at all.
I'd be more inclined to call a savings account an investment; as a savings account can be used for more long term financial planing of one's future.