Investment in shares is not gambling | The Guardian Nigeria News - Nigeria and World News

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Investment in any asset class is a tradeoff of risk and return. It is settled in portfolio management that there are four major asset classes- cash and cash equivalents, equities, fixed income, and real estate.

Apart from what is called systematic or undiversifiable risk, which is inherent to the entire market or market segment, each asset class has its peculiar risk. Risk appetite largely determines whether one is an investor, speculator, or a gambler.

Some people, either for lack of knowledge or deliberate mischief classify investment in stocks as gambling. This is incorrect.

This is where securities professionals commonly called stockbrokers become gatekeepers. These professionals keep tab on all the sectors of the economy. They do many analyses before recommending, buy, sell or hold to an investor. Stockbrokers are not God. A sudden occurrence can negate their analysis, but they encourage their clients to diversify holdings as a hedge against unforeseen risks. The processes and procedures for investment in shares show that it is not gambling.

 

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