May 7, 2013
What is the difference between being a speculator vs. an investor? Examples?
What is the difference between being a speculator vs. an investor? Examples?
A speculator would be someone, such as a day trader, that buys and sells on a very quick basis. This can bring higher rewards, but adds much higher risk and tax. Being an investor is going for the long haul, dollar cost averaging money into a long term fund and letting compound interest and lower taxes create wealth over time.
Another fine answer, Brayden. Well done! Speculators spend their days trying to outmaneuver and outsmart the next guy. These types of people probably like to go to Vegas and gamble whatever paycheck they have left after losing their shirts in the markets. DO NOT be a speculator. It is a loser’s game!
The investor is just as Brayden stated. He/she will do their research (educate yourself from teachers and not salesmen), identify the appropriate asset allocation based on their situation, buy those boring and cheap no-load index mutual funds, take emotion out of the investment decision-making process, and rebalance as needed over time. Time and patience will serve you well as that compound interest gradually increases your wealth. Become the wise and efficient investor. You’re worth it!