The “Casino Effect”

25 Nov 2015

I often ask workshop attendees to tell me “What’s the number one goal of a casino when you walk in?”  The answer I normally get is “To take your money!”  Honestly, this is partially correct. However, the real number one goal of a casino is very simple–To make sure they get you to STAY in their casino as long as possible.  They know the odds are very good that the longer you stay in the casino, the better the chances are they will be able to separate you from your money.

You see, you can use this same approach to investing.  Not that I like comparing investment markets to a casino, but hear me out on this. Most investing evidence has demonstrated that the longer you invest (or stay invested) in most asset classes, the better your chances are you will make money.  No rocket science or guarantee here folks, it’s just common sense.  Go look at any asset class you want on a 10, 20, or 30 year time horizon and I bet you will not find many losers. But, if you go look at the same asset classes over 10, 20, or 30 months, I bet you find most, if not all, have lost money at some time in the short term.

The point I am trying to make here is that you can use the same odds casinos use to take your money to turn these into the odds you can make money investing.  It’s rarely about your timing of the market. More often than not, it’s about your time IN the market that counts. So next time you go to a casino, ask yourself, “How much is that FREE buffet really costing me?”


Good Luck!



Jeffrey Johnston

Jeff has over 30 years of experience in the investment industry. He currently holds his FINRA Serices 6, 63, 66, 7, 24 & 51 licenses with LPL Financial as well as his health and life insurance licenses.