Is Investing in the Stock Market Gambling?

Is Investing in the Stock Market Gambling?
The German market index DAX curve is displayed at the German stock exchange in Frankfurt/Main on March 9, 2012. Daniel Roland/AFP/GettyImages
Carrie Schwab-Pomerantz
Updated:

Dear Carrie: My boyfriend is on his phone all the time trading stocks. Sometimes, he makes a lot of money quickly, and other times, he gets upset because he loses. Overall, though, he says it’s fun and that I should invest, too (right now, all of my money is in savings). To me, it all feels like gambling and scares me. Am I missing something?—A Reader

Dear Reader: I can’t say for sure what your boyfriend is doing, but I think you’re onto something important, with the recent GameStop episode being the latest and most extreme example of stock speculating gone awry. Online tools have made it very easy to trade stocks with a simple click, often at no cost. Although this is convenient, it also allows people to buy and sell stocks without carefully thinking through their decisions. And therein lies the potential problem—and the distinction I make between sound investing and wild speculating (or as you say, “gambling”).

Carrie Schwab-Pomerantz
Carrie Schwab-Pomerantz
Author
Carrie Schwab-Pomerantz, a certified financial planner, is president of the Charles Schwab Foundation and author of "The Charles Schwab Guide to Finances After Fifty."
Related Topics