Rutgers professor teaches investing, not gambling

Ronnee Ades, assistant professor of professional practice in finance and economics at Rutgers Business School, faces a core teaching challenge: persuading aspiring financial advisors that capital markets are for investing rather than gambling. She emphasizes long-term diversification, disciplined processes and clear client objectives in her portfolio management course.

Ades reports that many students arrive with habits formed by online influencers and new betting venues. They followed high-profile rallies in meme stocks and cryptocurrencies, traded short-dated options and leveraged ETFs, and took part in prediction markets. They also saw spikes in retail trading during Hertz’s 2020 bankruptcy and recent episodes in South Korea where large numbers of investors bought highly leveraged single-stock ETFs that later collapsed and prompted regulator action.

Traditional finance education presented capital markets as a way to allocate funds to businesses, with lessons on the time value of money, compounding and diversification. After the 2007–2009 financial crisis, curricula added more emphasis on risk management. Ades notes that many students now prefer quick, high-risk trades to steady, long-term strategies.

Ades structures her teaching around two goals. First, she explains prediction markets and how they work: pooling many participants’ views to produce forecasts, aiding price discovery, providing liquidity and allowing risk transfer. Second, she insists that evidence supports disciplined, diversified investing over decades as a core method for client wealth accumulation, while recognizing that limited tactical moves can coexist with a steady core portfolio.

“Investing is not simply trading,” Ades tells her students, adding that frequent trading rarely succeeds for typical retail clients. Classroom work stresses discipline, defined objectives, patience and risk management so future advisors can construct portfolios that match client needs rather than chase trends.

Ades draws on historical and contemporary examples in class, including long-term value approaches and traders who built skills over years of wins and losses. Her stated aim is for students to leave the course able to build multi-decade plans that rely on diversified holdings and a consistent investment process, with only a small portion of assets allocated to short-term, higher-risk opportunities when appropriate.