The Realities of Investing: Are You an Investor or Speculator?


It just doesn’t seem possible from our 401ks, to our IRAs, to our brokerage accounts that our account values can decrease. For many investors, 2015 was a year of losses, and chances are that 98% of investors haven’t escaped market losses so far in 2016. And, it’s been since 2009 that we have experienced the same kinds of market loses reflected in our accounts. We’ve forgotten in our world of McFast and McWants (I’m guilty myself) that we should only expect one type of outcome: positive.


Many of my clients have experienced depressions, recessions, wars, expansions, periods of inflation, and innovations. They’ve seen a variety of stock market cycles, portfolio returns (positive and negative), and interest rate fluctuations, and yet they’ve survived. Do you remember when home mortgage rates were 18.5% in the early 80’s? Today they are around 4% for a 30 year mortgage. Maybe rates go that high again one day, but that’s for the future to determine.


Investing vs. Speculating

Are you investing or speculating?

When it comes to the stock market, right now it seems it’s on sale. When it comes to our investments, too many of us have become really good at purchasing high and selling low. We panic and lock in our loss. It’s not all that uncommon for me to hear “I’ll get back in when the markets calm down”. However, then the markets calm down, that’s when they are at their highest levels again. Now we’re back to purchasing at the highest levels and the sale prices are gone.

“Benjamin Graham asked a great question: are you an investor or a speculator when it comes to your investments?”

Bayport Investment Advisors

To follow up: Are you a long-term investor or do you try to time the markets? We have no way of predicting the future of the markets, but we can predict our own behavior and how we respond to the markets. Are you tired of buying high and selling low? Have you been chasing the shiny penny? When it comes to investing, have you adopted an investment philosophy? If you are worried about your investment portfolio, let’s talk.

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Ask yourself- can my portfolio support my lifestyle in my retirement? 

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