{"id":4869,"date":"2013-02-28T13:02:46","date_gmt":"2013-02-28T20:02:46","guid":{"rendered":"http:\/\/www.jasonapollovoss.local\/?p=4869"},"modified":"2018-09-21T02:04:13","modified_gmt":"2018-09-21T06:04:13","slug":"cfa-institute-asks-what-is-the-difference-between-investing-and-speculation","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2013\/02\/28\/cfa-institute-asks-what-is-the-difference-between-investing-and-speculation\/","title":{"rendered":"CFA Institute asks: “What is the difference between investing and speculation?”"},"content":{"rendered":"

In a\u00a0post on CFA Institute’s “Inside Investing” blog, Robert Hagstrom asks<\/a> of people, “What is the difference between investing and speculation?”\u00a0 Well, lo and behold, I addressed this very issue in my book, The Intuitive Investor: A Radical Guide for Manifesting Wealth<\/em><\/a>, on pages 85-86.\u00a0 Here is what I had to say:<\/span><\/p>\n

\u201cThere are a million ways to make money by investing.\u00a0 And the results of investing are measured objectively, not subjectively.\u00a0 It doesn\u2019t matter if you are nice to other people or if you go to church on Sundays.\u00a0 What matters is whether you make money or not.\u00a0 That said, there is a huge difference between speculators and investors.<\/span><\/p>\n

\u201cSpeculators are similar to gamblers.\u00a0 Gamblers rush to make money.\u00a0 Their time scale is often extraordinarily short, extending out only to the point where they no longer have any money, or have lost enough money to scare them into stopping their gambling.\u00a0 Gamblers obsess about big money and care little about risks.\u00a0 In fact, many gamblers are attracted to gambles with the highest risks.\u00a0 Gamblers often convince themselves they are different from everyone else.\u00a0 Gamblers often do not have a plan when they gamble because they are in it for the visceral and immediate rush.\u00a0 Gamblers are subject to their emotions.<\/span><\/p>\n

\u201cUnfortunately, many people who purchase interests in investments behave the way gamblers behave.\u00a0 People frequently make investments based on rumor, momentum, and speculation hoping to ride the wave of extreme fortune.\u00a0 With the fortune in hand the speculator believes that he will be happier.\u00a0 There is nothing wrong with any of this, as long as the speculation is serving the speculator.\u00a0 However, a speculator is not an investor.<\/span><\/p>\n

\u201cAn investor is a careful investigator looking to uncover opportunities, account for risks, and purchase business interests where returns exceed risks over a preferred investment time horizon.\u00a0 The primary difference between investors and speculators is consciousness.\u00a0 Investors are more cognizant of their choices than speculators because they take full responsibility for their choices.\u00a0 Additionally, investors bring to bear all of their personal power and capabilities to find that rarest of things: the excellent investment opportunity.\u201d<\/span><\/p>\n

In other words, the essential differences are time scale preference (long- vs. short-term), behaviors (i.e. the purpose of engaging in the activity), desired outcomes,\u00a0methods (investigation vs. guessing), and, of course, the degree of consciousness of the two parties (engaged vs. visceral).<\/span><\/p>\n

I couldn’t have been more public in my opinion!<\/span><\/p>\n

With smiles!<\/span><\/p>\n

Jason<\/span><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Jason Apollo Voss, CFA provides an answer to CFA Institute’s Inside Investing blog’s question: What is the difference between investing and speculation?<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-4869","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/4869","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=4869"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/4869\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=4869"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=4869"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=4869"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}