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    0 Replies Latest reply on Sep 30, 2010 3:41 PM by Freemarkets

    Gambling vs. Investing in the stock market

    Freemarkets Newbie
      How do you know if you are gambling vs. investing in the stock market.

      1) If you or your stock broker are picking stocks to beat the market based on some research report, you are gambling.
      2) If you are listening to some media outlets, or a broker and they says now is the time to get in or get out, you are gambling.
      3) If you buy a mutual fund based on past performance, you are gambling.

      Well that probably covers most investors! Unfortunately, there are stock brokers out there that tout stocks or their firms research as the best, and know when to get in and out of the market, are you kidding me. Most of it isn't worth the paper it's written on. Do you really think that if they were that good they would give it away. They want the commissions or the fees they can generate from you. Ever really see the fees in their packaged products, like their own mutual funds or closed-end funds, good luck!

      Listening to the media is even worst. The media is out there to sell itself and hype, to get you to watch. They love to hype and exaggerate situations to get your attention. If they don't make it look exciting or important, you won't watch them.

      Buying Mutual Funds on past performance even if on a 10 year track record is no guarantee of future performance. Look at the magazines that tout "Top Ten Funds" you should own. Next year it's a brand new Top ten. What happened to the year before, they don't care.

      Investing should be for the long term. Stay in and don't get out when times are tough, that's when you buy. Rebalance your portfolio on a quarterly basis. Stay with no-load Index funds, investing in many different asset catagories across the USA and International, with a mix of bonds. Investing can be real simple it you shut out all the noise of the media and the gambling terms listed above. Go to Vegas if you want to gamble.