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The stock market is like a casino in that hopeful investors are often seduced by worthless patterns. The market is also like a casino in that many overly cautious people stay away , fearful that they might lose money if stock prices dip. Finally, the stock market is like a casino in that Gamblers Anonymous welcomes compulsive stock traders with open arms, and recommends abstinence as the path to recovery. The crucial difference between roulette and stocks is that the stock market in fact is a benevolent casino. Meaning, it is investors who have the edge — not the house. Corporations, as a whole, make profits and distribute a portion of their profits to investors in the form of dividends and share buybacks. Stock investors may win or lose in the short run, but they will surely make money in the long run. The real secret to successful investing is to keep our eyes on that long run — to not be distracted by wishes and dreams, and not be excited or upset by short-term price fluctuations. Don’t think about next week — think about the next 30 years.
For the original version including any supplementary images or video, visit https://www.marketwatch.com/story/why-winning-investors-know-that-stocks-are-money-machines-not-slot-machines-2018-06-04
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