However, if you want to invest wisely, you will need solid information and portfolio diversification. Knowledge and Diversity Leverage your time by utilizing other people s research. The information used by portfolio managers to make their stock selections is public knowledge and therefore available to everyone. Diversification simply means spreading out your portfolio over many investments so that you avoid excessive exposure to any single source of risk. In short, the difference between gambling and investing lies in the approach you take in allocating your money.
Some people do well with investments.
A long term diversified strategy for accumulating wealth while protecting against unrecoverable losses. The gambler may indeed make a lot of money in the stock market, but he has risked losing all his savings, foregone sleep on many nights, and should probably think of buying stock in an antacid company. Let's explain this principle by examining the two hypothetical investors. Both John and Mary have opened accounts for buying and selling stock in the market. John decides that he is going to make a fortune in a pharmaceutical company which he heard on a tip was going to have a new miracle drug.