Is there a hard threshold? Do high risk investments such as penny stocks qualify as gambling? Do low risk investments? Annuities? Bonds? CDs?
This comment got me wondering.
Is it more to do with the venue? Stock markets and real estate vs casinos and the lottery?
Were the MIT Blackjack Team gambling or investing?
Is this just another semantic hotdogs are sandwiches discussion or is there an agreed threshold?
It becomes gambling when you are going on gut feelings without researching what you’re doing.
If you have an investment strategy that financial advisors approve of, let’s say investing 70% in a US index fund, 20% bonds and 10% high risk mutual funds that you don’t touch for years or decades, that’s investing.
If you’re just randomly picking stocks, buying and selling in order to make a quick buck because of some guy screaming at you on television without any real research into a company other than a few google searches, that’s gambling.
I want to remind everyone that there is no guarantee that the market / index funds continue to go up. It hasn’t happened in the US market, but look at the Nikkei over the last 30 years - if you had invested in the 90s you would only now be getting some of your money back - that is a long time.
I feel you have literally picked the single most unique example for markets not going up. You make it seem like the US’s market will need to experience the same thing eventually, and I don’t think most people would agree with that assertion. Japan’s economy is a very strange and unique case.
You make it seem like it didn’t already: The US market didn’t reach its 1929 peak again until 1954. 25 years is a long time to hold out on withdrawing your retirement investments.
Here’s two other modern markets:
The Athens Stock Exchange had peaks in the 2000’s that haven’t recovered.
Ukraine’s stock market has ceased operations since the invasion.
These events are rare, but not unheard of.