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MetroVanIndependent.com
June 2015
Feature
Are you investing or gambling?
By Allen Espejo
Have you read the parable of the
talents?
It's a story about a rich man who
entrusted three of his men to handle his
talents. He gave five talents to the first one,
who immediately traded them and gained
five more. The second one was given two
talents and in the same manner doubled
the talents.
In this parable, I always wondered how
they were able to double their investment
in a very fast way. Did they invest or did
they gamble?
Other than gambling, stock market is
one of the most popular ways to double
your money fast. Since I'm at it, let me
ask you this question, is trading stocks
gambling?
During the 2008 crisis, a lot of people
got their stock market investments nearly
wiped out, including myself. People
were withdrawing their money and who
wouldn't?
Warren Buffet said, "Be fearful when
others are greedy and greedy only when
others are fearful."
This is not easy to comprehend
especially when you see your life savings
being wiped out. I'm glad I trusted Mr.
Buffet’s wisdom because today, I have
more than quadrupled the portfolio I kept.
Having said this, are stocks the best
paper asset in the world?
Among all paper assets (stocks and
shares, bonds, currency and cash), the
stock market is known as the fastest way
of growing your money. On the contrary,
it is also the fastest way of losing money.
If you know well how it works, investing in
stock market is not gambling.
When you invest in stocks, you own
a share of common stock in a company.
In layman's term, you own the company.
It entitles you to a claim a fraction of the
profits that the company generates.
Gambling, is taking money from a loser
and giving it to a winner. You don’t have
to learn much what you are betting in too,
you just take your chance. No value is ever
created.
Investing in stocks is not for everyone.
You have to have a very high risk tolerance
because of its volatility. The first time I
invested in the stock market, I lost all my
money. It was painful.
Remember, knowing s