Very often, we come across peers and friends who believe that investing in mutual funds is likely to be gambling. Let’s have a look on the differences between investing and gambling.
Gambling like betting over a sports match or a casino lasts only as long as the event does. You cannot recover your money you lost during the respected event. On other hand, investing is a long term process where you have chances of making profits over the years over your initial investment.
While in gambling, there is no such risk-mitigation strategies applied. Whereas, mutual funds’ investments help you diversify your money.
If at gambling you lose money with an unlucky hand, you lose all of it at once which has no recovery option. Whereas when mutual funds are performing poorly, you have an option of rebalancing by withdrawing your units and reinvesting them again in funds which are successful and which can recover your funds.
INFORMATION IS KEY:
There is no prior information available at the casino table about the players and that’s the reason you always have to go with your gut feeling. While in mutual funds you have excess information available about the funds.
The Potential For Growth:
You can even get rich 10 years from now by investing a small amount in equity today and this kind of growth and predictability does not exist in gambling.
GET STARTED WITH SAVING TAX, GROWING YOUR MONEY, MANAGING SAVINGS FOR SHORT TERM NEEDS.
SAVE. INSURE. INVEST.
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Written By – “Jinal Solanki”