Recently, people have been contacting Gambling Help Online to talk about their stock market accounts. Many in our community are currently experiencing financial turbulence. While the stock market can be a legitimate investment option, it’s important to understand that during this time of economic instability, the stock market can also pose great financial risk. If you’re finding yourself distressed by your stock portfolio, it’s important to understand that you’re not alone.
A caller Matt* told us that he recently used the COVID-19 assistance arrangements to withdraw $10,000 from his super fund to “invest” in the stock market. He thought he was making a sound, responsible decision, but immediately saw the market value of his stocks decline.
Another caller, Rob*, liked the challenge of speculation and thought he had a fool-proof investment strategy that was mathematically-based. It all came unstuck when his partner found out that he’d kept information about this account out of their discussions about finance.
Because stock-market talk always includes words like investment and skill, and because the money is invested in real, working companies, it is easy to forget that the value of that company/share price can rise and fall. There is no such thing as a ‘sure thing’. The market is notoriously hard to predict — in fact, there was a 2013 experiment where a ginger cat named Orlando outperformed a panel of wealth management ‘experts’ in picking stocks.
The market is constantly moving — and, like the game of musical chairs where you don’t want to be the one without a chair when the music stops, likewise you don’t want to be the one holding a stock when the market suddenly changes.
These are uncertain times. You too might be nervous about your investments. We cannot offer you specific financial advice, but we would encourage you to talk to your financial advisor or broker about your portfolio or, if you are someone who doesn’t pay for external advice, to consider re-acquainting yourself with some of the well-tried principles of stock market trading.
Stay informed
The Federal Government’s MoneySmart service reminds you to consider your long-term goals and research to make well-informed decisions. It also gives you specific information about where to get financial assistance. To ride the ups and downs of the present unstable market, they offer the following tips:
- Avoid focusing on market volatility
- Don't try to time the market
- Review your financial goals
- Beware of investment scams.
Visit MoneySmart to learn more about each of these tips.
So, be well informed about the companies that you invest in and how they might perform in the current economic climate. Get some good advice and avoid taking a chance.
Remember: gambling is defined as:
“The staking or risking money or anything of value on the outcome of something involving chance.”
If you’re finding yourself distressed financially, it can be tempting to gamble — not only on the pokies, but the stock market. If you’re tempted to make risky decisions, get in touch with us first. We’re available 24/7 to assist you with any of your queries or refer you to appropriate advice.
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