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Value Creation Blog

Are You An Investor Or A Speculator....

Posted by Josh Patrick

Too many times people think they're being an investor, when in reality they're just speculating in the marketing.  And when you're speculating, you might just as well take your money and go to Vegas to see how you do.

Watch this video on the difference between the two and let me know what you think about this topic in the comments below.

 
Basics of Investment Management
 
Transcript:
 

Are You An Investor Or Speculator?

This is a question that I think everyone who has money to invest for whatever reason needs to ask. Your answer will help you decide what types of investments and investment advisors you might want to use.

At the end of this short video I hope you have a good idea of where you land.

Hi , I’m Josh Patrick, the founding principal here at Stage 2 Planning Partners.  Thanks a lot for deciding to spend a few minutes with us.

Do you think it’s possible to beat the market?

This is the big question. If you believe you can beat the market, what besides your gut tells you that this is true? If you tell me that it must be true, consider this. Very few professional managers ever beat the market.

If you’re trying to beat the market, you’re not an investor, you’re a speculator. Not that being a speculator is bad. It’s just that many speculators wish they had been investors when they look at the investment returns they’ve gotten.

Let’s face it, most professional investment managers never end up beating the market, in the long term. If you believe that statement (and it is true) what makes you believe you’ll be able to beat the market.

This is a really important question I want you to answer.

Here’s a question I want you to answer…..Are you able to spend several hours a week examining investment options?

If you decide that being a speculator is for you, you’re going to need several hours a week to research where your money should go.

I want you to answer this question, do you have an extra four to ten hours a week to manage your investments? If the answer is yes, then being a speculator might be an OK decision for you. If the answer is no, think about being an investor and let the market work for you.

Here’s another question for you. Do you want to work with an advisor or make your own decisions?

If you really want to be a speculator, you likely won’t need an advisor. But, you’re going to spend several hours every week looking at your investments. An advisor provides investors many services that you as a speculator might not value.

On the other hand, if you see yourself as an investor, an advisor is a logical person to work with. Your advisor can help you choose long-term investments that have a track record of working to achieve your goals. Your advisor can help you stay the course when the market turns south. Your advisor can help you not get too excited when the market is doing well.

You get to decide which type of investor you are and then choose who if anyone can help you reach your outcomes.

Both investors and speculators need to answer this question: What is the time frame before you’ll need your investment cash?

Sometimes you might think you’re forced into being a speculator. Your timeframe is short and you haven’t saved enough money. Or at least this is what you might think.

If you haven’t saved enough money, the decision on whether to be an investor or speculator isn’t a good question. It’s when you need the cash and what type of *asset allocation model works best for you.

I know you might think timeframe has a lot to do with your choice of investments. The easy answer is it does. As you can probably tell by know I think being an investor is a much wiser choice. In my world the choices we would help you make is how much of your money would be in stocks, bonds and cash. Over time that has proven the most important decision to make. It’s something we help our clients make and I hope it’s something you’ll take seriously.

The truth is It really comes down to your own belief system.

How you invest your money always comes down to your own belief system. If you really believe you can beat the market and you’re willing to spend the time doing adequate research you might develop a very rare skill.

If instead you believe that markets are really hard to predict and want to use a low cost solution that gives you a good chance to match the market, then being an investor might be the best choice.  And, for the vast majority of investors matching the market provides a pretty good outcome.

It really comes down to having a conversation with a qualified investment manager. That conversation can help you decide what type of investor you are and the best way to reach goals that make you comfortable. After all, it’s all about making your life better.

I invite you to have a conversation with us. It won’t cost you anything and it might help you decide whether managing your own investments or working with an advisor is the best path for you. I believe it’s that type of decision that will make your life better.

So, here’s a step I want you to take.  I want you to click on the link below this video and set a time for us to talk.  It’s really easy and is free.

Thanks a lot for spending some time with us today.  This is Josh Patrick and you’re at Stage 2 Planning Partners.  I hope to see you back here really soon.

 

Topics: investment management, Investments, investment management video