Investing Is Not Gambling: Are We Teaching the Next Generation the Difference?

Investing is not gambling. But are we doing enough to teach the next generation the difference?

I often hear people say that investing is like gambling. There is a real fear of investing because people worry that they will lose their money, and continuous stock market coverage—especially when markets are down—only makes that fear worse. We continuously hear about how much the market has “lost” and what could go wrong next. What we hear much less about is what happens when we stay invested over long periods of time and allow businesses to grow and our investments to compound.

At the same time, the distinction between investing and gambling is becoming increasingly blurred. Prediction markets such as Kalshi and Polymarket allow people to put money on whether an event will happen—who will win an election, whether the Fed will cut rates, or who will win a football game. Day trading can blur the distinction further. Buying a stock because you believe a business will grow over the next decade is very different from buying it because you are trying to predict where its price will be tomorrow. The asset may be the same, but the activity and objective are very different.

The numbers are worth considering. A study of more than 700,000 online sports gamblers found that more than 95% were net losers, while a more recent analysis of Polymarket transactions found that about 69% of participants lost money over the period studied. Investing certainly involves risk, but when we invest in a diversified portfolio of stocks, we are buying ownership in productive businesses that generate earnings and have the potential to grow over time.

This distinction is especially important for our younger generation. They are growing up in a world where investing, day trading, sports betting, and prediction markets can all appear on the same phone and use much of the same language. We need to teach them that investing is not about predicting what will happen next; it is about owning productive assets, participating in their growth, and allowing time and compounding to work.