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What is the difference between investment and gambling?

What is the difference between investment and gambling?

    1 Answer

    1. nadeem

      nadeem

      • MBA (finance and operations)
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      MBA (finance and operations)
      • Both investing and gambling include putting money at risk in the hopes of generating a profit.
      • A basic idea in both gambling and investing is to reduce risk while increasing profit.
      • Gamblers have fewer options for loss mitigation than investors.
      • Investors have access to more relevant data than gamblers do.
      • As an investment, the odds will eventually work in your favor, but as a gambler, they will not.

      Diversification is one of the major distinctions between investing and gambling. Investing allows you to diversify your risk over many asset classes, whereas gambling puts all of your money into one pot with no loss mitigation method.

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