| The greatest stock market myth is the
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| | means, but one where you hold house
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| idea that investing in stocks is a form
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| | odds.Still not convinced?Maybe you're
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| of gambling!The financial markets are
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| | saying to yourself that just because
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| often compared to a casino. Put some
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| | corporate earnings rise in most years
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| money on X stock and you might as well be
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| | doesn't mean there aren't years in which
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| playing craps!If that's your impression,
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| | they fall. True enough. But over the last
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| and it's keeping you out of the markets,
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| | 200 years, business profits have
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| consider this:
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| | increased in far more years than they
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| If investing is organized gambling, it's
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| | have decreased. And that's because the
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| one of the rare kinds where the odds are
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| | economies in the developed countries have
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| stacked in your favor!Why is
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| | expanded at a fairly steady pace with
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| that?Corporate profits are the key to
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| | only several occasional setbacks from
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| understanding the investor's edge. By
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| | recessions.And that means stockholders
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| buying a share of stock gives its holder
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| | with a good mix of companies are more
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| an ownership claim on that company's
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| | likely than not to make money!Gambling
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| earnings. If those earnings go up, then
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| | just transfers money from a loser to a
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| the stock price will usually rise as
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| | winner because it produces nothing ...
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| well. Makes sense, doesn't it? Ownership
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| | excluding the severe doses of
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| of a company that has higher earnings
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| | adrenaline!On the other hand, investing
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| should be worth more than ownership of a
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| | increases overall wealth because the
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| company that earns less.An investment in
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| | capital invested in stocks provides the
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| the stock market comes down to this: It's
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| | initial funding for firms, which exist
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| a "bet" that corporate profits will rise!
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| | for the purpose to producing goods and
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| Based on the historical evidence, it's a
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| | services.
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| pretty good wager! Not a guarantee by any
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