Are you an investor or a speculator?

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This is actually a very important question because it defines what you should do and what you shouldn't.

What is investing?

When you invest into an asset you expect that this asset will give you a return. If you buy shares you expect to get dividends. If you buy a bond you will get interests. You get a return for depositing your capital.

Investing has also often an economical utility. The people who get your money can use it for a certain purpose and pay you for it.

A lot of people are speaking about passive income. It's actually nothing else than investing!

What is speculating?

You are speculating when you buy an asset and you expect to sell it at a higher price later on. You speculate on the price difference.

There is nothing wrong with speculating but it's important to understand what you are!

Are you an investor or a speculator?

I'm an investor because I can't sleep when I speculate. It stresses me and I don't feel well when I'm trading assets in the hope of making a profit on the price.

However I've no problem in investing. I invest into an asset that I expect to give me a good return at a low risk. I have the patience to wait for the return to accumulate. Not everybody is like that however. Maybe you don't have this patience and you enjoy the stress that goes along with trading.

Try to figure out what you are and try to get better at it! Knowing yourself is the key to getting better at what you are doing.




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18 comments
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Your current Rank (63) in the battle Arena of Holybread has granted you an Upvote of 8%

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This is an interesting question - as an on & off trader in the fiat stock market, over the past year, I have been more & more of an investor in crypto with Hive Engine as well as Coinbase & getting away from fiat.

While it's best to have a plan where you minimize your risk (as much as you can), I enjoy investing & it is important for my crypto future.

Now, I do occasionally speculate (or trade) but when I do this, I have done the research and have a plan. I have an entry as well as an exit. Sometimes, I will have a long order & know what my risk factor is & as long as I stay in those parameters, I can deal with it. Other times, it may be a short one where I do the whole process in that same day. Again, I will have a plan of sorts.

Ultimately, though, I am definitely much more of an investor because I like to look at the big future & want to have the ROI contributing to my future overall.

Awesome topic, Achim. Thanks for waking my brain up this early in the morning he he. Have a great week! 😀 💚

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Thanks a lot for this great comment. I think we ultimately have to know ourselves well. I have studied chart analysis and I was trading with options and warrants but it stressed me out over time. A bad trade could simply ruin my day and I started to invest into shares paying good dividends. I slept much better and earned about the same from it. I look at it not only from a financial point of view. I also factor in how I feel and how much I enjoy it.

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Yes, exactly! The mindset is very important as well. I never did heavy trading but when I did execute one, I made sure I did my due diligence first. Unfortunately, a lot of traders don't realize there is a psychology to trading as well. If you don't have a grasp on that, your trades can go very south. lol

It's knowing to never trade money you can't afford to lose & also never trade when you're bored or with high volatility (at least for me anyways). Then, I can rest easier lol.

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Psychology is a very important component in trading and unfortunately our instincts make us do the wrong things. You are right by preparing your moves well in advance. Like that you can limit this psychological influence on your decisions.

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A great explanation of the subject.
As for me personally I guess I am a bit of both, but mostly an investor.

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Thanks a lot for your feed-back. I think that by nature we are bit both but for me, I feel much more comfortable in the shoes of the investor and accumulator :-)

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(Edited)

This is an interesting topic and question... I would say that I'm both... Maybe more to an "investor" side as I want to see that my money/assets work for me... But, on the other side, for the sake of diversification, I have some coins/assets for speculating purposes... :)



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When I was younger I believed I was a typical trader and speculator. As long as I made profits this was true but I discovered my real nature when I made my first big losses. Since them I know that speculating is bad for my health...lol. Of course I still do it a bit but I prefer the accumulation and investment approach.

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I have a similar view, and a similar history... hahahah... The investing approach is definitely less stressfull...

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