A Nation of Speculators and Gamblers

In the famous Kenny Rogers song aptly named "The Gambler", he alludes to the fact that a good gambler must "know when to hold 'em; know when to fold 'em; know when to walk away; [and]know when to run." I find this to be a fascinating illusion to how investors view the stock market.

The Merriam-Webster dictionary defines Investment: noun; the outlay of money usually for income or profit. If you look at the definition of the word, most investors are not investors at all. They are seeking some magical riches from what Kenny Rogers would probably call gambling. At the very least they are speculators, trying to guess the right short-term play to get their "winner's high".

I hear people say "I'm getting out [of the market] when I get back what I put in," or "When my GE stock gets back up to $35, then I'll be happy," or "Surely Ford stock will go up from here!" These are all the sayings of gamblers - speculating with their retirement livelihood for the possibility of great riches.

I'm not a gambler. I never get the itch to find the buried treasure at the bottom of a slot machine or the craps table. But I really love Las Vegas! My wife and I have gone to Vegas several times and had an absolute blast. The best investment in yourself is a few uninterrupted hours at the pool at Bally's or the Ritz Carlton in Lake Las Vegas and then a great meal at Bobby Flay's Mesa Grill on the way to see Cirque de Soleil. I recommend "O", which is all done in water - it is amazing! My wife and I simple do not gamble, unless you are talking about an untested crab stand in Baltimore.

So if the stock market does not fit the definition of "investment" in the dictionary, it carries way too much volatility for the average investor, and the historical returns are not what people think they are, why would anyone bother with stocks? There are two reasons I can think of: 1) they are not aware of the secured investment (not speculation) options available to them, or 2) it is simple addiction to the thrill of the ride.

It is important to understand that there are no guarantees that stocks will offer profitable returns in the future - even in the long run. It really only takes one gigantic loss to collapse a dream. Unless your financial and retirement dreams are founded with a secure foundation, your dreams could end up a nightmare.

Do your homework on secured alternative investments that offer income and growth benefits. You will thank me later...