September 6, 2013

When it comes to investing, there are speculators and there are investors. What is the difference and why should you care?

2 thoughts on “September 6, 2013”

  1. Katherine Graham says:

    Investors do their research, identify the asset allocation that fits their particular situation, buy no-load index mutual funds, take emotion out of their decision-making, and re-evaluate their situation as needed. Speculators try to outmaneuver/outsmart the next guy. Whenever I make a decision in life, I like to be educated on the topic. If I act like a speculator, I will lose. If I take the time to educate myself (like investors do), I will become a wise and efficient investor.

  2. Mike Finley says:

    Well said, Katherine. You made many fine points. Please allow me to add to them. Investors are long-term planners as they focus their efforts on investing over 10, 20, and 30 year time periods. They don’t care what the market does today, this week, this month or even this year. They care what the market does over the next few decades.

    The speculator tries to make a fast buck by outfoxing someone else. They attempt to time the market, make money, and then get out and then repeat the process again and again. When someone tells you investing in the stock market is like gambling, they are right when they are referring to speculators. Speculators let their greed and fear drive their short-term decision-making.

    Bottom line: If you want to grow your money over time become the wise and efficient investor as you buy those boring no-load index funds at Vanguard and watch the speculators burn out trying to outmaneuver one another. You don’t want to be one of them BESIDES you can’t afford it!

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