What is the stock market?
A stock market, or for that matter a share market is a place where buyers and sellers of stocks meet and trade. Here stocks are also called as shares and the stocks include both, those that are listed on the stock exchange and those that are traded privately and not listed on the exchange.
What is termed as gambling?
Gambling is the wagering of money or for that matter, trading something of value on the happening of an event. This happening of the event is short-term. The outcome of this event is uncertain and money is wagered in order to gain a handsome profit. Therefore, more simply, gambling is betting money on the happening of an event to gain a profit. This happening of the event is short term and is against the natural rules of finance. Therefore, it is termed as gambling.
What is investing?
To invest is to devote resources whether time or money with an intent to earn a profit in the future. This benefit may be tangible or intangible. It may be of a monetary nature or material nature.
In financial terms, the expected benefit of investment of money is a return, again, in terms of money, in the form of capital gain, investment income including dividends, interest, rental income, etc. Investing is always for the long-term for example for three/five/seven/ten years. Investing within the rules of finance is considered healthy and therefore it is not gambling and the person who does it is called as an investor.
Why is the stock market used for gambling instead of investing?
It is human nature to seek a return or reward if one invests money or time, both of which carry value. When the money is put in the stock market with an intent to “gamble”, then it is called as gambling. However, if someone puts money in it with an intent to” invest”, then that is called as investing. However, majority of the people investing in the stock market tend to do it for the short term and therefore they are said to be “gambling”, as explained above.
Very few of them actually invest money to “invest”. In fact, it will not be wrong if we say that the stock market runs thanks to the gamblers. If people start, putting money in the stock market for the long-term, more than half of the brokerages will not be able to do any business. Thus, we see that not only the stock market, but also a host of other businesses are thriving on the human nature of being a gambler.
The thought of earning handsome returns, fast, is akin to committing suicide. However, seldom do people understand this principle. It is against the rules of finance, but even then very few people follow it. This is because it is human nature to seek thrills. Therefore, stock markets are often being used for gambling instead of investing.