What do these two commercials from Betfair Casinos and Interactive Broker that recently aired in New Jersey have in common? One promotes the ability for people to gamble from their homes as if they were at one of the failing Atlantic City casinos, and the other commercial promotes the ability for individual to actively trade stocks on a computer from anywhere – including while at a restaurant on a date.
The Betfair Casino commercial from has individuals discussing how exciting it was that they were able to gamble and make money without leaving their homes. BetfairCasino.com is a joint venture between UK-based gaming operator Betfair and the Golden Nugget Atlantic City.
Betfair Casino first launched operations in November 2013, and is currently one of two real-money and regulated online gaming facilities operating under the Golden Nugget license.
The question that I have is how many individuals they needed to contact for the commercial before getting a few who actually made any money.
Any look at the gambling industry would confirm that the odds are always in the casinos’ favor, and thus the casinos will benefit from individuals being given ready access to their games. The odds are so bad for players that the firm recently offered new depositors a match bonus of 100% up to $1,500.
The casinos used to entice individuals to their brick-and-mortar casinos with entertainment and free drinks and designed the room to eliminate the normal sensory clues of time duration such as clocks and windows. Now, unfortunately they were permitted to enter people’s homes and make it convenient for them to gamble from the kitchen table.
The second commercial is from Interactive Brokers company. It shows a couple out on a date and as they sit down at the restaurant, the woman informs the man that she needs a second to make stock trades as an earthquake rocked Asia and that “everyone who can” is selling. He responds, “it’s 8 pm so who can sell?” She informs him that through her broker that she is able to trade around the clock in various time zone locations to keep pace with all the information as it occurs. She decides to do “some hedging trades” right there at the table while he waits. (Watch the ad here: TV Commercial )
Both commercials highlight the speed and availability of access as a benefit. There may be a benefit, but it’s not to the individual. Sensible investing is accomplished by determining what the opportunities and needs are for you and your family, and developing a plan using a long term outlook for investments.
Many studies of individual trading indicates that the more one trades or even views their portfolio accounts, the less their investment performance. So why does the broker want individuals to have 24-7 access? The same reason the casinos want individuals to be able to gamble 24-7.
Investing guru Jack Bogle, founder of US tracker fund giant Vanguard, wrote recently,
I could not agree with such a trading mentality. Time and again, clear statistical evidence has confirmed that the more investors trade, the more their returns fall short of the stock market return.
Once the plan is determined, then the investment portfolio needs to be developed for their short, intermediate and long-term. When this is done correctly, there is no need to have 24 7 access to the portfolio for trading purposes. Look to hire a financial advisor who uses the long term perspective to meet your specific opportunities.
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