Investing vs. Trading vs. gambling

Investing vs. Trading vs. gambling

Investing

Unlike short-term and fixed gambling, investing is a long-term game. Investing has a specific goal that is putting up money to get a return for anything like college expenses or retirements. Planning in investing is essential. Plan it before investing, and your portfolio should have a resemblance. It is based on the time value of money, and you invest for the long term and money compound over time.

Trading

Trading is closely related to investing. It is a fun and short-term play. When buying a particular stock, you take frequent moves, which is trading like in day trading, where you buy and sell multiple times in a day. For trading, you may need more money as you should diversify 20-30 stocks. Also, it incurs more transaction fees.

Gambling

Gambling is also fun but always expect losses just like happens in casinos. Day trading also sometimes becomes gambling.