What has been the difference between “investing in the stock market” and a game of “musical chairs” or “poker”?
Best answer:
Answer by John F
Musical chairs has no financial risk whatsoever. There is a potential gain in the form of a pri e of some sort, but the players typically don’t risk anything of value. It is merely a game.
Poker has a financial risk, but for a skilled player the long-term outcome is based on solid mathematical principles. If you bet only in situations where the payout is higher than the probability of winning, you will gain in the long term. There is a randomi ing factor (a deck of cards) that makes the results unpredictable in the short term, but long-term results favor the skilled player.
When you invest in the stock market, you risk money. The money is an investment to be used by companies who are seeking to achieve profit. If the company makes a profit, you will likely make money on the investment. Success is based on a wide assortment of factors including market conditions, management decisions, etc. which are impossible to predict on a purely mathematical basis.
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