Is investing in penny stocks riskier than playing the slot machines at a casino?

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Ryan Fuchs, Financial Planner

@RyanFuchs • 08/07/15 This answer was first published on 08/07/15. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

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I would tend to say yes. At least with slot machines, you know that on average, they have to return a certain percentage of money back to the players (for example, 85%, 90%, 97%, etc. depdning on the slots denomination). So, you know that if you play long enough, then on average, you should only lose a certain amount of money.

With a penny stock, there is no guarantee that they must return anything. You could very easily lose your entire investment, even if you held it for decades.

So, from that standpoint, I would suggest that slot machines could be considered less risky.

That being said, whether you are talking about gambling at a casino or investing in penny stocks, never "invest" more than you can afford to lose.

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Larry McClanahan, Financial Advisor

@LarryMcClanahan • 08/07/15 This answer was first published on 08/07/15. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

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If you enjoy that kind of gambling/speculation, you'll just want to (1) make sure you limit funds to a very small part of your assets that you can afford to lose, and (2) plan in advance that you're gonna lose it. Good luck!

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