Is Participating in the Stock Market a Form of Gambling?

If, as was suggested in this column earlier, gambling is wrong because it is profiting at someone else's expense and does not show love to your neighbor, what of shareholding in the marketplace?

In that previous article, I defined gambling as “artificially increasing risk in order to profit at someone else’s expense.” Therefore, I do not view shareholding in the stock market as inherently gambling.

People can definitely gamble with their money at the stock market, but that is not what it is intended to do. For instance, people can bet and gamble on a football game. But that does not make any playing or watching the sport of football a form of gambling.

The stock market, as I understand it, is designed for investors to purchase shares of ownership in companies and profit from their growth in value. In return, companies get capital to help them grow their business. It is intended to be a win-win trade-off. There are risks, of course, as not every company does well. But that is a natural risk of doing business. It is not an artificially increased risk. All sorts of human actions and relationships carry risks. Risk alone does not turn something into gambling.

Overall, stocks tend to rise in value over the long term. Investors who hold on to stocks long term usually earn profits. But when people focus on making a quick buck, it distorts investment into a form of gambling. These end up playing the stock’s short-term fluctuations for profit, often in disregard of a company’s actual worth and performance.

Scripture warns against such desires for get-rich-quick schemes: “A faithful man will be richly blessed, but one eager to get rich will not go unpunished” (Prov. 28:20).

People who invest for the long term in shareholding are not, in my view, necessarily gambling. There are, however, other ethical considerations with shareholding. For example, do the companies we invest in have ethical business practices? Do they attempt to be environmentally conscious? Ethical investing is an option.