If there is one thing both investing in the stock market and online poker obviously have in common, it’s gambling. Both require the high levels of risk, and there is often hard earned money on the line. However, online poker for US citizens, does offer some insight into investing in the stock market, and can offer practical lessons for a relatively inexpensive price. A few easy, yet invaluable, lessons online poker can teach you about investing include:
Poker players rarely go all in on the first hand, and generally ones that do risk losing immediately. To monitor their wagering, most poker players will ease themselves into a game. They may start by placing small bets until they get a feel for the other players. The same goes for stock investing – especially for novice investors. If you don’t have experience in the stock markets, don’t be afraid to start small. Let yourself get comfortable and get a true feel for what is going on before making further investments.
Some Things Are Just Out of Your Control
No one wants to admit that they are not in control – especially when their money is involved. However, just like with poker, it’s true for investing too. Poker is a game of skill and probability, and so is investing in the stock market. While you may be able to may be able to choose seemingly stable stocks, unexpected economic and political factors can affect any stock.
Although certain factors may be out of your control, that doesn’t mean that you should turn a blind eye to your investments. What it does mean is that you need to gain a greater sense of awareness. In poker, a player knows that there are times when luck may not be on his side. However, instead of playing blindly, he focuses on what he can control: his own reactions. For investors, it means knowing what is going on in the world around you, and knowing how those things could affect your investments. So when a political or economic event occurs, you know how to react to save your investments.
Know When to Fold
In poker, the players who stay in the game the longest and reap the greatest rewards, are those who know when to fold. The same goes for investing. While we may not want to admit it, not every investment is going to have a high return. Some may even fail completely. To avoid losing more money than necessary, learn when to pull out of an investment. There is no reason to ride a stock into the ground because it may eventually turn around. Doing so, could cost you hundreds, if not thousands, in invested dollars.