December 2, 2013

What defines the difference between a speculator and an investor?

3 thoughts on “December 2, 2013”

  1. Katherine Graham says:

    Speculators spend their days trying to outmaneuver/outsmart the next guy. Whereas, investors do their research, identify the appropriate asset allocation for them, buy no-load index mutual funds, re-balance their investments as needed, and don’t let their emotions drive their decision-making process when it comes to investing.

  2. Mike Finley says:

    That was a great answer, Katherine. Let’s recap.

    Speculators try to be psychics as they attempt to predict the future. This is a really bad idea and past performance confirms it. When someone states investing is like gambling, this is a perfect example of it. Don’t do it!

    Investors have no intent to predict the future whether that be 10 years from now or 10 minutes. They follow the advice Katherine laid out with her comments and they stay with it through thick and thin for long periods of time as they laugh at the gobbilde goop they see on a daily basis coming from the boob tube or anywhere else. They are investors!

  3. Brett Ensign says:

    The most realistic distinction between the investor and the speculator is found in their attitude toward stock-market movements. The speculator’s primary interest lies in anticipating and profiting from market fluctuations. The investor’s primary interest lies in acquiring and holding suitable securities at suitable prices. Market movements are important to him in a practical sense, because they alternately create low price levels at which we would be wise to buy and high price levels at which he certainly should refrain from buying and probably would be wise to sell.

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