Investing Vs Gambling In The Market With Today's Economy

As I right this the Dow is down somewhere in the neighborhood of 500-600 some odd points. It’s times like these I think people should know the difference between gambling with their money or choosing to invest it. The market will allow you to do either, but make no mistake, most people gamble, and not invest their money.

Let me say that I am no financial expert, and that although I work in the financial industry I am not a broker, and anything I mention here is purely for entertainment purposes. You should seek professional advice before making any financial decision.

When someone tells you that you are investing, take a closer look and see what you are buying into. It’s probably a stock of some sort. A stock is a representation of part ownership in a company. The question is what does that mean for you?

When you buy a stock at a certain price, you hope that it goes up in value so you can sell it and make a profit. Well I have news for you, that’s gambling. You just purchased an expensive lottery ticket in the hopes that it pays off someday.

That share of ownership gives you some perks, you can probably vote for members of the board, and propose items for the board to consider. In all honesty though, you will never own enough for your vote to mean anything.

How can you invest in a company than?
Dividend stocks. You pay a market price for a stock, and the company pays you every quarter. Now you actually own a piece of the company and have a stake in how it does. The best part about dividend stocks is they get slammed just like other stocks when the market panics, like today.

General Electric is a good example of a great dividend stock. The price of its shares have been pummeled lately, which makes its dividend all the more attractive. With the price of GE right now, just before market close, the dividend is yielding 6.54% I don’t see many savings accounts paying that right now.

There is still risk, GE could stop paying it’s dividend to save money, or even maybe go bankrupt; both are unlikely for such an established company though.

You are also still gambling in a way as well. The share price might go down, which means if you sold it right away it would mean a loss for you, or it might go up and you could make a gain. If you hold it for the long term, you will get a nice tidy sum paid every quarter, and the price will probably be higher than what you bought it for a long time back.

If you take the time to do some research and find the great companies that pay great dividends, days like today are perfect opportunities to maximize your yield. It’s one of the easiest ways to make sure you come out ahead no matter what the traders do.