"So where you should invest your money? There's no single safe place to invest your money if you're looking for big returns. For a while, we thought we could safely put our money in stocks. But the Internet bubble in the early 2000's and the recession of 2008 crushed a lot of people's stock portfolios. We thought it was real estate, but housing prices dropped significantly after 2008. We thought it was gold, but even gold sometimes retreats.
That's why we invest in several places. You should never go all in with your investments, or you'll suffer what is called "Gambler's Ruin". The idea behind this is that if you keep gambling all your money against a casino that has infinite money, then you will end up losing all of your money. Even if you win in the beginning, you will lose all of your money over time, because it is a negative sum game. By this I mean that the casino always has a slightly lighter chance of winning, so you will lose money in the long run. Therefore, if the person played forever, then the chances of that person losing all of his money would be 100%."
This is from Allen Wong's book Lifehacked.
That's why we invest in several places. You should never go all in with your investments, or you'll suffer what is called "Gambler's Ruin". The idea behind this is that if you keep gambling all your money against a casino that has infinite money, then you will end up losing all of your money. Even if you win in the beginning, you will lose all of your money over time, because it is a negative sum game. By this I mean that the casino always has a slightly lighter chance of winning, so you will lose money in the long run. Therefore, if the person played forever, then the chances of that person losing all of his money would be 100%."
This is from Allen Wong's book Lifehacked.
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